Preamble

The House met at a Quarter before Three of the Clock, MR. SPEAKER in the Chair.

PRIVATE BUSINESS.

SUNDERLAND CORPORATION BILL.

Lords Amendments considered.

The Chairman of Ways and Means (Sir Dennis Herbert): Except for two protective provisions, these Amendments are purely drafting.

Lords Amendments agreed to.

Milford Haven and Ten by Water Bill [Lords]

Read the Third time, and passed, with Amendments.

Falmouth Docks Bill [Lords].

Read a Second time, and committed.

London County Council (General Powers) [Money].

Resolution reported,
That, for the purposes of any Act of the present Session authorising the London County Council, among other things, to construct certain embankments and embankment walls on the River Thames, it is expedient to authorise the payment out of moneys provided by Parliament of such sum as may be necessary to enable the Commissioners of His Majesty's Works and Public Buildings to pay to the London County Council such contribution towards the cost of the construction of the embankment wall (Work No. 1) to be authorised by the intended Act as may, with the consent of the Treasury, be agreed between the said Commissioners and the London County Council.

Resolution agreed to.

Oral Answers to Questions — INDIA.

GOVERNORSHIPS (APPOINTMENTS).

Mr. Thurtle: asked the Under-Secretary of State for India the procedure by which persons whose names are to be sub-

mitted as suitable to fill vacancies in the Governorships of Indian Provinces are chosen; how long this procedure has been in existence; and whether any regard is had to the religious beliefs of these persons?

The Under-Secretary of State for India (Lieut.-Colonel Muirhead): Appointments to Governorships in India are made by His Majesty on the recommendation of the Secretary of State for India, who takes such action as he considers appropriate in each case before submitting his recommendation.

Mr. Thurtle: Will the hon. and gallant Gentleman answer the last part of the question and say whether any regard is had to the religious beliefs of these persons?

Lieut.-Colonel Muirhead: Of course, my Noble Friend in any advice which he may submit to His Majesty has regard to the general fitness of the person who is being considered. This necessarily involves consideration of a number of factors, which I do not think it would be possible for me to detail in answer to a question.

Mr. Thurtle: Is there any significance in the fact that two Governors recently appointed have been Roman Catholics? Is that the result of any change?

Lieut.-Colonel Muirhead: No, Sir, the hon. Gentleman may be assured that there is no particular significance to be attached to that fact.

Mr. Logan: Is the hon. and gallant Gentleman satisfied that the two persons appointed in those cases were fit persons—that they were truthful and honest?

Lieut.-Colonel Muirhead: I think that both persons are truthful and honest.

PRISONERS, AURANGABAD GAOL.

Mr. David Grenfell: asked the Undersecretary of State for India whether he has any statement to make on the arrest and imprisonment of Hindu demonstrators at Aurangabad, Nizam State, on 17th June; and what representations he has received regarding the conduct of the police during the arrests and subsequent to the incarceration of these men and women in the prison at Aurangabad?

Lieut.-Colonel Muirhead: I have received from the Incorporated Hindu Association in London, and I have seen


in the Indian Press, an allegation that on 7th and 8th June prisoners in the Aurangabad Gaol were ill-treated. I have also seen in the Indian Press a categorical denial of this allegation by the Hyderabad authorities.

Mr. Grenfell: Has the hon. and gallant Gentleman any means of discovering which of these two reports is accurate? Will he make those inquiries, and inform the House whether the complaints are really justified or not?

Lieut.-Colonel Muirhead: I explained recently to the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) how we were situated in the matter. The Resident is in close touch with the Ruler, and my Noble Friend is in close touch with the Crown representative, but it would be necessary to be satisfied that special circumstances existed before it would be appropriate to ask for a special inquiry.

Mr. Grenfell: Are not reports of 100 people being maltreated while in custody sufficiently important to warrant a special inquiry by the Resident?

Lieut.-Colonel Muirhead: As I said, my Noble Friend is in close touch with the Crown representative on this matter, but up to the moment he is not satisfied that a case has been made out for a special inquiry.

Mr. Grenfell: Will the hon. and gallant Member undertake to make a report on the subject to this House?

Lieut.-Colonel Muirhead: I would prefer to wait and see what particular information was received.

Oral Answers to Questions — SPAIN.

4. Mr. Day: asked the Prime Minister the result of the findings of the board of inquiry set up by the Foreign Office to investigate the allegations that consular officers carried documents containing military information across the Spanish frontier; whether the investigation by the examining magistrate at San Sebastian has been concluded; and what is the present position of the officials concerned?

The Under-Secretary of State for Foreign Affairs (Mr. Butler): The board of inquiry has not yet submitted its re-

port, owing to the fact that its inquiries cannot be concluded on the evidence so far taken in the Spanish courts. The persons concerned have been set at provisional liberty.

Mr. Day: Can the right hon. Gentleman say whether, as a matter of fact, the Spanish investigation has been concluded?

Mr. W. Roberts: Can the right hon. Gentleman say whether any of the persons concerned have been prevented from leaving Spain on account of this matter?

Mr. Butler: I have not heard so.

Mr. Dobbie: asked the Prime Minister whether his attention has been called to the case of four Spanish citizens who have landed in Gibraltar, one of whom has since died, and the demand of the Burgos authorities for their return to that country; and what is the attitude of His Majesty's Government to that demand?

Miss Wilkinson: asked the Prime Minister whether he has received from the Spanish Government any demand for the extradition of the Spaniards who swam from Algeciras to Gibraltar; and whether, in view of the many executions of republican sympathisers recently, he will give an assurance that he will not hand these men back to the present Spanish authorities?

Mr. Jagger: asked the Prime Minister whether he can assure the House that extradition will not be granted in the case of the members of the Spanish Republican Army who swam to Gibraltar?

Mr. Butler: I have seen accounts in the Press, and the Governor of Gibraltar has been asked to report fully on the matter. No request for the extradition of these men has been received by my Noble Friend from the Spanish Government.

Mr. Dobbie: In the event of a request for extradition coming along, can we have the assurance of the Prime Minister that these men will not be sent back to what would be certain death?

Mr. Butler: My Noble Friend would wish to see the report of the Governor of Gibraltar in the first place, but the point of view put by the hon. Member will certainly be borne in mind.

Oral Answers to Questions — FAR EAST (SITUATION).

5. Captain Plugge: asked the Prime Minister whether he can make a statement as to what further action the Government have taken to secure the release of the British Military Attaché, Colonel Spears?

Mr. Butler: Repeated representations have been made to the Japanese Government by His Majesty's Ambassador in Tokyo, and the matter has also been taken up with the Japanese Embassy in London. Sir R. Craigie will continue to press for Colonel Spears' early release.

Captain Plugge: Can my right hon. Friend say whether any definite charge has been preferred against Colonel Spears; and can he also say how long Colonel Spears has been detained by the Japanese?

Mr. Butler: He has, in our opinion, been detained far too long. No definite charge has yet been formulated against him.

Mr. Thorne: asked the Prime Minister whether he can give any information about the Japanese occupation of the islands of Hainan, Spratley and Hanoi; how far Hanoi is from the bay of Cam-ranh our principal naval base; whether the Government of the United States of America have informed him that they are protesting about the Japanese occupation of Hanoi in view of its effect upon the Philippine Islands; and whether he can give any information about the Japanese establishing a submarine base at Hainan?

Mr. Butler: The Japanese naval authorities have declared the port of Hoihow, on Hainan, open again to trade. My Noble Friend has not yet received any confirmation of the report that the Japanese are constructing a submarine base on this island. Otherwise I have nothing to add to my statement of 12th June in reply to the hon. Member for North Cumberland (Mr. W. Roberts) about the Japanese occupation of Hainan and Spratley Islands. Hanoi is the capital of the Indo-Chinese province of Tonkin, a French protectorate.

Major-General Sir Alfred Knox: asked the Prime Minister (1) whether, as the Japanese at Tientsin still continue to inflict humiliations on our fellow-countrymen, he will announce that,

failing an immediate improvement, he will denounce the Anglo-Japanese Trade Agreement of 1911;
(2) when the conference at Tokyo will begin?

Lieut.-Commander Fletcher: asked the Prime Minister whether he proposes to inform the Japanese Government that negotiations at Tokyo cannot be initiated or continued without an undertaking that the blockade at Tientsin shall be lifted and outrages against British subjects, property, and shipping shall cease during their continuance?

Mr. Butler: As the Prime Minister has already informed the House, the negotiations at Tokyo will be conducted on the assumption by His Majesty's Government that an end will be put to outrages on British subjects. It is expected that these negotiations will begin about the middle of this week. My Noble Friend's reports indicate that a certain number of British subjects daily pass the barriers, where the restrictions have latterly been less vexatious.

Sir A. Knox: Surely something could be done to stop these humiliations which are really lowering our prestige all through the Far East? Cannot we do something?

Mr. Butler: As the hon. and gallant Gentleman knows, as a result of His Majesty's Government's representations, the situation has shown the improvement to which I have referred.

Lieut.-Commander Fletcher: Is it not the case that while His Majesty's Government have stated that they expect the outrages upon British subjects to stop, they have not stated that they expect the blockade of Tientsin to be raised while the negotiations are going on?

Mr. Butler: I would refer the hon. and gallant Gentleman to the Prime Minister's statement on 28th June which I quoted, and which states the attitude of the British Government on the matter.

Lieut.-Commander Fletcher: Is it not the case that no condition has been made that the blockade should cease?

Mr. Butler: No, Sir, the position is as stated by my right hon. Friend.

Mr. Thornes: Do you intend to force the blockade?

Mr. Noel-Baker: Can the right hon. Gentleman assure the House that while the negotiations are going on and at their conclusion, His Majesty's Government will do nothing to prejudice the rights of the Chinese Government under international law, and nothing which will recognise the legitimacy of the present Japanese invasion of China?

Mr. Butler: I think I can give that assurance.

Mr. Thorne: Can the right hon. Gentleman say whether he has not got enough ships to prevent a blockade?

Mr. Arthur Henderson: asked the Prime Minister whether his attention has been called to the recent declaration of the Japanese Prime Minister laying down conditions and reservations in relation to the forthcoming Anglo-Japanese negotiations; and whether official representations have been made by the Japanese Government to the same effect?

Mr. Butler: The answer to the first part of the question is in the affirmative, and to the second in the negative.

Oral Answers to Questions — ANGLO-FRENCH-RUSSIAN CONVERSATIONS.

Mr. Dalton: asked the Prime Minister whether he can now make any further statement regarding the negotiations between His Majesty's Government and the Government of the Union of Soviet Socialist Republics?

Mr. Vyvyan Adams: asked the Prime Minister what stage has now been reached in the Anglo-Russian negotiations for a common front against aggression?

The Prime Minister (Mr. Chamberlain): His Majesty's Government and the French Government have sent further joint instructions to their representatives at Moscow, who have now had two further conversations with M. Molotov. Certain further suggestions have been made by the Soviet Government which are now under consideration, and on other points we have not yet received their reply.

Lieut.-Commander Fletcher: asked the Prime Minister whether, with a view to reassuring certain anxieties felt by Finland and the Baltic States, he will make it plain that in any arrangement

His Majesty's Government may enter into with France and Russia in fulfilment of our guarantee to Poland and Rumania, there is no intention of interfering in any way in the internal affairs of the countries referred to, but that the objectives of any such arrangement will be the defence of their vital interests, the protection of their freedom and independence, and the maintenance of their neutrality?

Mr. Quibell: asked the Prime Minister whether he can give an assurance that no sovereign State contrary to its will shall be included in any non-aggression pact entered into by His Majesty's Government?

Mr. A. Henderson: asked the Prime Minister whether it is the policy of His Majesty's Government that any agreements to resist aggression to which His Majesty's Government is a party, will not impair the independence and freedom of the Baltic States?

The Prime Minister: It is the general policy of His Majesty's Government to maintain respect for the integrity' of all sovereign States. In particular, they are aware of the desire of Finland and the Baltic States to preserve their independence and neutrality, and as this is also the objective of His Majesty's Government they will naturally take full account of these considerations in the present negotiations.

Mr. V. Adams: asked the Prime Minister whether he will arrange to despatch the Secretary of State for Foreign Affairs to Moscow?

The Prime Minister: No, Sir.

Mr. Adams: Might not the presence in Moscow of some Cabinet Minister help to satisfy Oliver Twist?

Mr. Lipson: Will the right hon. Gentleman consider sending the right hon. Member for Epping (Mr. Churchill) to Moscow on behalf of His Majesty's Government? [Laughter] I put this perfectly seriously. Does he not think that such action on the part of the Government would have a very good effect both in this country and in Europe?

Mr. Thurtle: Has not the right hon. Gentleman already sent the right hon. Member for Epping (Mr. Churchill) to Coventry?

Oral Answers to Questions — EUROPEAN SITUATION.

Sir William Davison: asked the Prime Minister whether, in view of the German propaganda campaign with regard to the alleged danger to Germany of encirclement on British initiative, he will make it clear to the German Government and people that any guarantees given by Great Britain of assistance in the event of aggression to other States are also available to Germany should she so desire?

Mr. Butler: I would refer my hon. Friend to the replies given to the hon. and learned Member for Kingswinford (Mr. A. Henderson) on 3rd May and to the hon. Member for Wolverhampton, East (Mr. Mander) on 10th and 17th May, which stated the attitude of His Majesty's Government on this question.

Sir W. Davison: Can my right hon. Friend ask the German Government how is it possible for Germany to have any anxiety with regard to the alleged danger of encirclement, if she receives a guarantee from Great Britain and France that, in the event of any aggression by any of the Powers adjoining her, they will go to her assistance? Cannot we have an answer from Germany on that very important point?

Mr. Butler: I can speak only for the British Government and I would remind my hon. Friend that the Prime Minister's answers on previous occasions referred to possible exchanges of reciprocal assurances.

Marquess of Clydesdale: asked the Prime Minister whether he will make a suggestion to Herr Hitler that the methods adopted to settle the problem of the South Tyrol, by the removal of the German population to Germany or Southern Italy, might well be employed in settling the problem of Danzig by a similar removal to Germany or South Poland; and will he also suggest to Signor Mussolini that these principles might be applied in the case of Tunis?

Mr. Butler: Official information of the methods for dealing with this question is not available. My Noble Friend is, therefore, unable to form any view as to whether they would be applicable to the problems of Danzig and Tunisia.

Marquess of Clydesdale: Does the Prime Minister agree that such an arrangement would be infinitely' prefer-

able to the people of Danzig to a war of which they would be the centre? May I further ask him whether he will remind Herr Hitler and Signor Mussolini that by their settlement of the South Tyrol, where alone in Europe a simple frontier revision is possible, they have not got a leg to stand on in demanding territory else where?

Sir Archibald Sinclair: Can we be assured that these very important considerations will be borne in mind?

Mr. Butler: Any such important considerations will be borne in mind, but I should require to have more detailed information as to how this transfer is taking place and the method adopted before I could suggest a general application for it.

Mr. Lipson: Have the Government taken steps to secure that information?

Oral Answers to Questions — DANZIG (BRITISH POSITION)

Mr. Harold Macmillan: asked the Prime Minister whether His Majesty's Government will issue a declaration to the effect that any change in the present status of Danzig, other than by an agreement to which the Polish Government is a party, whether brought about externally by military action on the part of Germany or internally by a movement initiated or supported by the German Government, will be regarded as an act of aggression on the part of Germany and, therefore, covered by the terms of our pledge to Poland?

Lieut.-Commander Fletcher: asked the Prime Minister whether any attempt to alter the existing regime at Danzig by aggression from outside or penetration from within will be regarded as within the terms of our pledge to maintain the independence of Poland; and has a communication been made to the Polish Government in these terms?

Mr. A. Henderson: asked the Prime Minister whether he has any statement to make on the present situation in Danzig?

Mr. V. Adams: asked the Prime Minister whether he has any further statement to make on the attitude of His Majesty's Government towards the position of Danzig?

Mr. Thurtle: asked the Prime Minister whether he is now satisfied that the head of the German Government no longer has any doubt of the intention of this country to discharge to the full the undertaking it has given to Poland; or has he under consideration any further action with a view to removing any possible doubt or misunderstanding which may still exist?

The Prime Minister: I would ask hon. Members to be good enough to await the statement which I propose to make at the end of Questions.

Later—

The Prime Minister: I have previously stated that His Majesty's Government are maintaining close contact with the Polish and French Governments on the question of Danzig. I have nothing at present to add to the information, which has already been given to the House about the local situation. But I may, perhaps, usefully review the elements of this question as they appear to His Majesty's Government.
Racially Danzig is, almost wholly, a German city; but the prosperity of its inhabitants depends to a very large extent upon Polish trade. The Vistula is Poland's only waterway to the Baltic, and the port at its mouth is, therefore, of vital strategic and economic importance to her. Another Power established in Danzig could, if it so desired, block Poland's access to the sea and so exert an economic and military stranglehold upon her. Those who were responsible for framing the present statute of the Free City were fully conscious of these facts, and did their best to make provision accordingly. Moreover, there is no question of any oppression of the German population in Danzig. On the contrary, the administration of the Free City is in German hands, and the only restrictions imposed upon it are not of a kind to curtail the liberties of its citizens. The present settlement, though it may be capable of improvement, cannot in itself be regarded as basically unjust or illogical. The maintenance of the status quo had in fact been guaranteed by the German Chancellor himself up to 1944 by the ten-year Treaty which he had concluded with Marshal Pilsudski.
Up till last March Germany seems to have felt that, while the position of Danzig might ultimately require revision, the question was neither urgent nor likely to

lead to a serious dispute. But in March, when the German Government put forward an offer in the form of certain desiderata accompanied by a Press campaign, the Polish Government realised that they might presently be faced with a unilateral solution, which they would have to resist with all their forces. They had before them the events which had taken place in Austria, Czecho-Slovakia and the Memelland. Accordingly, they refused to accept the German point of view, and themselves made suggestions for a possible solution of the problems in which Germany was interested. Certain defensive measures were taken by Poland on 33rd March and the reply was sent to Berlin on 26th March. I ask the House to note carefully these dates. It has been freely stated in Germany that it was His Majesty's Government's guarantee which encouraged the Polish Government to take the action which I have described. But it will be observed that our guarantee was not given until 31st March. By 26th March no mention of it, even, had been made to the Polish Government.
Recent occurrences in Danzig have inevitably given rise to fears that it is intended to settle her future status by unilateral action, organised by surreptitious methods, thus presenting Poland and other Powers with a fait, accompli. In such circumstances any action taken by Poland to restore the situation would, it is suggested, be represented as an act of aggression on her part, and if her action were supported by other Powers they would be accused of aiding and abetting her in the use of force.
If the sequence of events should, in fact, be such as is contemplated on this hypothesis, hon. Members will realise, from what I have said earlier, that the issue could not be considered as a purely local matter involving the rights and liberties of the Danzigers, which incidentally are in no way threatened, but would at once raise graver issues affecting Polish national existence and independence. We have guaranteed to give our assistance to Poland in the case of a clear threat to her independence, which she considers it vital to resist with her national forces, and we are firmly resolved to carry out this undertaking.
I have said that while the present settlement is neither basically unjust nor illogical, it may be capable of improve-


ment. It may be that in a clearer atmosphere possible improvements could be discussed. Indeed, Colonel Beck has himself said in his speech on 5th May that if the Government of the Reich is guided by two conditions, namely, peaceful intentions and peaceful methods of procedure, all conversations are possible. In his speech before the Reichstag on 28th April the German Chancellor said that if the Polish Government wished to come to fresh contractual arrangements governing its relations with Germany he could but welcome such an idea. He added that any such future arrangements would have to be based on an absolutely clear obligation equally binding on both parties.
His Majesty's Government realise that recent developments in the Free City have disturbed confidence and rendered it difficult at present to find an atmosphere in which reasonable counsels can prevail. In face of this situation, the Polish Government have remained calm, and His Majesty's Government hope that the Free City, with her ancient traditions, may again prove, as she has done before in her history, that different nationalities can work together when their real interests coincide. Meanwhile, I trust that all concerned will declare and show their determination not to allow any incidents in connection with Danzig to assume such a character as might constitute a menace to the peace of Europe.

Mr. Harold Macmillan: Arising out of the reply—regarding which the whole House is grateful to the Prime Minister for having clarified the position—may I ask whether the Government will take as serious a view of any attempt to change the actual de facto status of Danzig as they would any attempt to change the legal and de jure status?

The Prime Minister: I think that, having made a careful and considered statement, it is inadvisable for me now to try and elaborate it in reply to a supplementary question.

Mr. A. Henderson: Can the Prime Minister say whether the three stipulations that were publicly announced on Friday last by what the Press called an authoritative spokesman as to the basis of any negotiations with a view to securing a settlement of the Danzig question represent the official policy of the Polish Government?

The Prime Minister: I have not heard any official information about that.

Mr. V. Adams: As it is vital that the Prime Minister's statement should stand entire without any bewildering embroidery, will my right hon. Friend invite the "Times," therefore, to refrain from embellishing or belittling it?

Oral Answers to Questions — LEAGUE OF NATIONS.

Assembly (British Delegation).

Mr. Noel-Baker: asked the Prime Minister whether he can state the names of His Majesty's Government's delegation to the next Assembly of the League of Nations?

Mr. Butler: If the hon. Member will be good enough to repeat his question in a week's time it should then be possible to give him an answer.

Danzig.

Mr. Bellenger: asked the Prime Minister whether the High Commissioner is still resident at Danzig; and whether he has submitted any reports to the League Secretariat regarding the importation of arms and ammunition into Danzig?

Mr. Butler: Yes, Sir. My Noble Friend is making inquiries of the League Secretariat about reports.

Mr. Bellenger: Is the League Commissioner still resident in Danzig?

Mr. Butler: Yes, Sir.

Mr. Noel-Baker: Have the Government considered summoning the Committee of Three to consider the matter of the fortification of Danzig?

Mr. Butler: There is no such suggestion.

RUSSIA AND CHINA.

Lieut.-Colonel Macnamara: asked the Prime Minister whether he can make a statement as to the extent of the hostilities in progress in the Far East between Russia, or Russian influenced, and Japanese, or Japanese influenced, troops; and how British interests are affected thereby?

Mr. Butler: According to reports which my Noble Friend has received, clashes are stated to have taken place in the


neighbourhood of Lake Buir, on the Manchurian-Mongolian border, between Soviet-Mongolian forces and Japanese-Manchurian forces. Fighting, in which tanks and aeroplanes have been engaged, appears to have taken place at intervals since nth May. The extent of the forces involved and the casualties sustained are obscure owing to the conflicting reports published by both sides, and as the region is remote and inaccessible. There are no British residents or property in the area.

Captain Ramsay: asked the Prime Minister whether the League of Nations has ever notified the acts of aggression committed by Soviet armies in China, which culminated in the imposition of the Soviet system on the Province of Sinkiang in 1933, and subsequently on the Province of Szechuan?

Mr. Butler: There has undoubtedly been a wide extension of Russian influence in Sinkiang during the last few years. But the system of government has not been Sovietised in either of these Chinese provinces, nor has either been the object of armed aggression by the Soviet Union.

Captain Ramsay: Is it not a fact that the same forces of international finance that made these acts of aggression are also trying to force a war at the present moment?

RUSSIA.

Captain Ramsay: asked the Prime Minister (1) whether the League of Nations has ever recognised the seizure of the Ukraine by the armies of the Soviet in 1919;
(2) Whether the League of Nations has yet accepted as legitimate the invasion and conquest of Georgia, without declaration of war, in 1921, by the 7th, 12th and 9th Soviet armies, whereas Great Britain, France, Belgium, Italy and Japan had granted Georgia de jure recognition six months previously?

Mr. Butler: At the time when the Ukraine and Georgia were incorporated in the Soviet Union, that country was not a member of the League of Nations. Acceptance of the Soviet Union as a member of the League in 1934 implied recognition by the League of the Union as then constituted.

Captain Ramsay: In the case of Georgia, had not the Soviet itself given de jure recognition to Georgian independence?

Mr. Butler: At any rate, when the Soviet Union made application to become a member of the League, it had already incorporated these two areas, and they were recognised as part of the Soviet Union.

NAVAL AND MILITARY PENSIONS AND GRANTS.

Mrs. Adamson: asked the Minister of Pensions (1) whether he will state in connection with the issue of the special identification form to persons in receipt of pensions from the Ministry of Pensions, reference No. M.P.I.F. 27, what Committee of the House of Commons made the request for this to be done, and for what purpose is this information necessary; and whether due consideration has been given to the feeling of the ex-service men having to describe the nature of their disabilities;
(2) upon what statutory authority he acts when enforcing that the payment of pension is liable to be deferred until the questions in the special identification form reference No. M.P.I.F. 27 are answered: whether the assistance of his Department will be given in tracing such records as are essential for the completion of this form; and whether, in certain cases, the limit of 21 days will be waived so as to avoid any hardship being incurred?

The Minister of Pensions (Sir Walter Womersley): The form referred to was introduced following the second report of the Committee of Public Accounts, 1919, and is in use by public departments in similar classes of case. The sole object of the form is to secure the identification of pensioners, and to protect the Exchequer against personation. The form is drawn up to preclude any person other than the pensioner being in a position to give correct answers to the questions it embodies, consequently the disclosure of the information by my Department would defeat the object in view. It is desirable that there should be no unreasonable delay in the completion of the form, as it is, of course, in the interests of pensioners as well as the Ministry that identity should be established. Consideration is always given to


cases which are known to have special features, and I shall be glad to look into any individual case in which hardship has been represented, and which the hon. Member cares to send me.

Mrs. Adamson: Does the right hon. Gentleman think it is really necessary 20 years after the last War to ask ex-service men to give intimate details of their wounds and disabilities incurred in the service of the nation, in order to establish their identity for entitlement to the continuance of their pensions?

Sir W. Womersley: The form is not sent in mental cases or to blind persons or pensioners in institutions or under treatment or to very old people, and in difficult cases our inquiry officers will render any necessary assistance.

Mr. Watkins: Will the hon. Gentleman say to whom this form is sent?

Sir W. Womersley: It is sent to the pensioner. To whom would the hon. Member expect it to be sent?

37. Mr. Gallacher: asked the Minister of Pensions whether his attention has been drawn to the case of Mrs. Laing Wilson, of Thornton, whose son was killed in the War; is he aware that when she was remarried in 1921 she was given a remarriage grant of £11 and her pension was stopped, and, in view of the hardship with which this mother is confronted, will he take the necessary steps to restore her pension for the son she lost in the War?

Sir W. Womersley: As the hon. Member has already been informed, the gratuity paid to Mrs. Wilson in 1921, when her pension ceased on her remarriage under the provisions of Article 23 of the Royal Warrant, represented the only further payment which my Department could make to her, and it is not within my power to restore her pension.

Mr. Gallacher: In view of this and many other similar cases of very great hardship arising out of the War, will the Minister not seriously consider getting new regulations, or is it essential that a mother should suffer as this woman is suffering owing to her losing her son in the service of the country?

Sir W. Womersley: I am making careful investigation into all matters relating to

the Royal Warrant, but I am not prepared to make any statement at this moment on a question, like this, of high policy.

Mr. Gallacher: Will the question of new regulations be considered, as there are so many cases in the country?

Mr. Stephen: asked the Minister of Pensions whether he will state the number of female officers, staff officers, executive officers, higher clerical officers, clerical officers, clerical assistants, superintendents of typists, shorthand typists, and copying typists, in the Ministry of Pensions who are being transferred to the new office at Hayes, Middlesex; the losses in pay which will be sustained by such officers; whether the staff concerned has been given due notice of the move; and whether efforts are being made to avoid the transfer of those members of the staff for whom the move would involve particular hardship?

Sir W. Womersley: As the question relates wholly to staff in my Department, I have been asked to reply. The following female staff of the grades mentioned are to be transferred to the new office at Hayes, Middlesex:

Higher clerical officer
…
1


Clerical officers
…
12


Clerical assistants
…
75




88

A provisional selection has been made of the staff to be moved, and notice has been given to the individuals concerned. Sympathetic consideration is being given to those cases in which it is represented that transfer would involve exceptional hardship.

As regards the rates of pay, I would refer the hon. Member to the reply given by my hon. and gallant Friend the Financial Secretary to the Treasury, to the hon. and learned Member for Ilford (Mr. Hutchinson) on 27th June, which explains the operation of the regulated system of provincial differentiation laid down in the agreement with the staff side of the National Whitley Council. Under the arrangements covered by this agreement, there would be no immediate loss of pay in the cases of 85 officers. The three other officers are clerical officers whose London rate exceeds the provincial


maximum; the pay of two would be reduced by £14 and one by £20 per annum. I may add that the application of the agreement to this transfer is under discussion with representatives of the staff through the usual channels.

GERMANY (JEWS).

Mr. Hannah: asked the Prime Minister whether, in view of recent German decrees about the Jews, the Government will offer to co-operate with that of Germany in a scheme for their gradual and orderly evacuation from the Reich?

Mr. Butler: The promotion of orderly emigration of refugees from Germany is one of the chief aims of the London Inter-Governmental Committee. By their membership of the Committee, His Majesty's Government have made it clear that they are ready to co-operate in all possible steps to this end.

Sir W. Davison: Can my right hon. Friend say why it is, if the German Government desire to get rid of these Jews from Germany, they will only let them go after taking their property and appropriating it

Mr. Butler: I would refer my hon. Friend to the recent statement of the German Government on the subject, which should, I think, repay study.

Miss Rathbone: Can the right hon. Gentleman state when the Government Committee will hold its next meeting, as it was stated in the Press that it would be held this week in London? Is that the case?

Mr. Butler: I should require notice of that question.

Sir A. Sinclair: When the right hon. Gentleman says the recent statement of the German Government would repay study, does he mean that these Jews will be enabled to take their property out of Germany, because I did not gather that?

Mr. Butler: It is not as simple as that.

Oral Answers to Questions — TRADE AND COMMERCE.

CONSULAR SERVICE (ALLOWANCES).

Mr. Day: asked the Secretary to the Overseas Trade Department the amount

allowed for expenses to the 96 non-British members of the Consular Service who are maintained by His Majesty's Government in various cities and towns; and how much of this sum is allowed for personal expenditure?

Mr. R. S. Hudson (Secretary, Overseas Trade Department): Thirty-seven receive office allowances totalling approximately 3, £300 a year to meet their office expenses on Consular work. With one exception, these allowances contain no provision for personal remuneration. The remainder are allowed to retain a percentage of the Consular fees they collect, which, in the majority of cases, are insignificant.

Mr. Day: Is the amount mentioned allowed to each Consular officer?

Mr. Hudson: Each Consular officer gets the office allowance appropriate to the particular post.

EXPORT CREDITS.

Mr. Bellenger: asked the Secretary to the Overseas Trade Department what is the sterling value of proposals submitted by British traders during the last six months in connection with exports to China; what proportion of such proposals has been approved; and what is the total amount of guarantees given by his Department during that period?

Mr. R. S. Hudson: During the six months ended 30th June, 1939, the total amount of the contracts, policies and guarantees issued by the Export Credits Guarantee Department was £30,365,207. It is not the practice to state the amount of the Department's commitments in respect of a particular country.

Mr. Bellenger: Is it correct to say that the amount guaranteed by the Department is less than £200,000; and if that is correct is it due to lack of initiative on the part of British traders, or does the fault lie with his own Department?

Mr. Hudson: It has been the practice of the Department, in order that individual transactions should be kept confidential, not to disclose details as to any country, and I am afraid that I cannot give any further information.

STEEL IMPORTS.

Mr. Stokes: asked the President of the Board of Trade whether his attention


has been called to the fact that the British Steel Federation is importing steel into this country at the rate of 2,000,000 tons a year; and whether he will take steps to remove the duty on all imported steel so that prices may assume their proper level?

Mr. R. S. Hudson: In addition to the normal imports of just over half a million tons of steel per annum under their agreement with the Continental Steel Cartel, the British Iron and Steel Federation have recently made arrangements to supplement our own crude steel production by the import over a few months of 300,000 tons of semi-manufactured steel for further manufacture in this country. The increased demand for steel has not been accompanied by any increase in steel prices. Any question of amending the tariff is a matter in the first place for the Import Duties Advisory Committee, but I may add that these additional imports are being licensed for admission free of additional duty.

Mr. Stokes: Is the right hon. Gentleman aware that it is the general opinion in the trade that the price of steel is already 20 per cent. too high? Seeing that tariffs were introduced for the purpose of allowing the industry to rehabilitate itself, and that it is now producing to capacity, is there any reason whatever why the protection should be continued?

Mr. Wedgwood Benn: Would the steel users be entitled to appear before the committee and state their case?

Oral Answers to Questions — AGRICULTURE.

MILK MARKETING BOARD (PENALTIES).

Mr. Day: asked the Minister of Agriculture what information he has received from the Milk Marketing Board as to the aggregate number of fines that have been imposed upon producers and retailers of milk, in pursuance of the Milk Marketing Scheme, since it came into operation?

The Minister of Agriculture (Colonel Sir Reginald Dorman-Smith): I am informed by the Milk Marketing Board that 2,116 penalties have been imposed on registered producers in pursuance of the Milk Marketing Scheme since it came into operation six years ago. The board has

no power to impose penalties upon retailers as such or upon any persons other than registered producers.

Mr. Day: Have many complaints been received that the board are not sufficiently firm with registered producers?

Sir R. Dorman-Smith: I have not any knowledge of such complaints.

Mr. Macquisten: Can the Minister say how many small farmers have been driven out of business by the Milk Board?

WORKERS.

Mr. John Morgan: asked the Minister of Agriculture whether he has concluded the conversations he initiated with the trade union representatives of the farm workers concerning future farming policy; and, if so, has he come to any decision concerning the farm workers' demand for a statutory minimum wage of £2 per week?

Sir R. Dorman-Smith: It has been my intention to maintain contact with representatives of farm workers and to consult them on matters affecting farming policy when such consultations are likely to prove useful. I am receiving a deputation from the Trades Union Congress on 19th July in regard to the drift of farm workers from the land, the standard of living of agricultural workers and other matters. In regard to the last part of the question, I would remind the hon. Member that the fixing of statutory minimum wages is, under the Agricultural Wages (Regulation) Act, 1924, a matter for the Agricultural Wages Committees.

Mr. Morgan: Does the Minister, then, suggest that he is in a position to grant farmers up to £25,000,000 or £30,000,000 a year and not in a position to improve the wages of the farm workers?

Sir R. Dorman-Smith: That will depend on the prosperity of the industry.

Mr. T. Smith: Does not the right hon. and gallant Gentleman agree that the agricultural worker deserves a far better wage than even £2 a week?

Mr. Dingle Foot: Would the Minister not agree that the payment of new agricultural subsidies ought to lead to a substantial improvement in wages?

Sir R. Dorman-Smith: I hope that the general prosperity of the industry will lead to that.

Mr. J. Morgan: asked the Minister of Agriculture what would be the estimated annual cost of raising the wages of all adult regular farm workers by 5s. 6d. per week?

Sir R. Dorman-Smith: No statistics are available showing the actual number of workers who are employed in agriculture the whole year round. The annual agricultural returns show the numbers of workers employed on 4th June, who are classified as "regular" and "casual," but the fact that a worker is described therein as casual does not necessarily mean that he is not employed (by different farmers) for the whole year. There is also the difficulty that the number of workers shown in the returns include members of farmers' families who assist in the work of the farm but who are not usually employed under contracts of service and so are not in receipt of wages as such. For these reasons my Department cannot make a reliable estimate of the annual cost of raising the wages of all adult regular farm workers by 5s. 6d. per week.

Mr. Morgan: Is the Minister in a position to give an approximate figure?

Sir R. Dorman-Smith: Not one that would be accurate.

Mr. Morgan: Is it not becoming apparent to the right hon. and gallant Gentleman that the whole House is getting very dissatisfied with his attitude on this matter?

Mr. T. Smith: asked the Minister of Agriculture the number of wage-earners employed in agriculture in England and Wales, and Scotland, at the present time, and for 1924 and 1932?

Sir R. Dorman-Smith: I regret that particulars are not available of the number of actual wage-earners employed in agriculture at the present time, but, with the hon. Member's permission, I propose to circulate in the Official Report a statement giving the numbers of workers employed on agricultural holdings, in June, 1924, 1932 and 1938, the figures for 1939 not being as yet available.

Mr. Smith: If there are no reliable figures in the Department with regard to wage-earners how did the Minister of Labour estimate the figures for unemployment insurance?

Sir R. Dorman-Smith: the trouble is that if we were to try to get accurate figures of the number actually engaged in this work it would mean calling in all the cards of the workers and getting the number from those statistics. We may have to consider that course.

Mr. J. Morgan: Has not the right hon. and gallant Gentlemen received instruction on this matter from the National Farmers' Union?

Sir R. Dorman- Smith: I do not receive instruction from them.

Mr. Macquisten: How is it that the farmers can make weekly returns of their milk and not of their workers?

Mr. George Griffiths: They know how many cows they have but not how many workers, according to the Minister.

Following is the statement:


Number of workers employed on Agricultural Holdings of over one acre on 4th June in certain years.


—

England and Wales
Scotland.
Great Britain.


1924
…
806,463
117,342
923,805


1932
…
697,481
111,257
808,738


1938
…
593,123
104,340
697,463

ALLOTMENTS, WOLVERHAMPTON.

Sir Robert Bird: asked the Minister of Agriculture whether he is aware that an area of 12 acres occupied by the Dunstall Park Allotments Association, and others, Wolverhampton, and intensively cultivated by them for 23 years, will be lost for food production if its proposed sale for building purposes is completed; and whether he will exercise his powers to retain this land in cultivation?

Sir R. Dorman-Smith: As the land in question is in private ownership and was not purchased or appropriated for allotments by the Wolverhampton Corporation, but only hired for the purpose, I have no power to prevent its sale and development for building purposes with the resulting disturbance of the allotment holders. I am informed that the corporation consider that in view of the high building value of the land it is impracticable to retain it for allotments. I understand that the corporation own other allotment land which they consider is reasonably suitable for the accommodation of the men who will be displaced.

Sir R. Bird: While thanking the right hon. and gallant Gentleman for that reply, may I ask him whether he will be prepared to use his well-known powers of persuasion to induce the vendor and the buyers of this farm land to postpone the completion of the sale on patriotic grounds until the present national emergency has disappeared and thus retain the cultivation of this fertile land?

Sir R. Dorman-Smith: I think the corporation will realise the views of the Government and the Ministry on this question, and I will do what I can to help.

POTATO MARKETING (MERCHANTS.' REGISTER)

Mr. Windsor: asked the Minister of Agriculture why Messrs. R. Brennand (Hull), Limited, of Humber Street, Hull, and Mr. H. B. Hobson, of Humber Place, Humber Dock Street, Hull, have been excluded from the register of authorised merchants under the Potato Marketing Board; and whether, in view of the fact that there is substantial support in Hull potato-trading circles for the inclusion of the firms in question in the register, he will reconsider the board's decision?

Sir R. Dorman-Smith: The question of the authorisation of merchants is one which is entirely within the discretion of the Board and is not one in which I have any power to intervene. I am informed, however, that the firms referred to at present deal only in new potatoes, for which no authorisation from the Potato Marketing Board is required, and that the board consider that the number of merchants already authorised is fully adequate to ensure the effective wholesale distribution of main-crop potatoes in the district.

DERELICT LAND (MINING AREAS).

Mr. G. Macdonald: asked the Minister of Agriculture whether he will give an estimate of the amount of derelict and semi-derelict land in Great Britain in consequence of the closing down and dismantling of collieries; and whether he will take consultation with other Ministers responsible for such work and the local authorities involved as to the best use to which such land could be devoted?

Sir R. Dorman-Smith: No, Sir. I have no information on which to base an estimate of the kind requested, but it is believed that the total area involved is not

large. If it would be economically practicable to use such colliery land for agriculture I think it would be taken up for this purpose and that action on the lines suggested is unnecessary.

Mr. Macdonald: Is the Minister aware that in Lancashire there are hundreds of acres of this derelict land and that it is nothing but an eyesore, and could not something be done about it?

Sir R. Dorman-Smith: I shall be glad if the hon. Gentleman will have a talk to me about it.

Mr. Hannah: Are not conditions very much the same throughout the Black Country?

PIGS.

Mr. Hannah: asked the Minister-of Agriculture whether arrangements can be made for the Pig Marketing Board to deliver hogs to the bacon-curers regularly in the numbers actually needed through out the year?

Sir R. Dorman-Smith: Questions relating to the supply of pigs to bacon factories are primarily for the industry itself to consider under the powers which Parliament has conferred by the Bacon Industry Acts. I have no power to intervene.

Mr. Hannah: Is my right hon. and gallant Friend aware that the Bilston curers are frightfully dissatisfied with the irregularity with which the pigs are sent?

Sir R. Dorman-Smith: I realise that.

CENTRAL SLAUGHTERHOUSES.

Brigadier-General Clifton Brown: asked the Minister of Agriculture whether he is now in a position to make any statement as to the consideration by the Livestock Commission of proposals for central slaughterhouse schemes under the Livestock Industry Act?

Sir R. Dorman-Smith: The Livestock Commission have given careful consideration to the proposals submitted by local authorities and others for the establishment of the three experimental slaughterhouses envisaged in Part V of the Livestock Industry Act, 1937. These proposals, numbering 12 in all, to the preparation of which great care had evidently been given, have also been discussed by the Commission with representatives of


the applicants. The Commission have decided that, having regard to the situation of the proposed slaughterhouses and the manner in which it is contemplated that they will be designed, equipped and managed, the proposals of the Edinburgh, Leeds and Leicester Corporations are, subject to modification in detail, the most suitable for the experiments and, subject to satisfactory settlement of various outstanding matters, the Commission will proceed with the preparation of slaughterhouse schemes in connection with these proposals. The Commission have further decided that, in the event of any of these proposals not being proceeded with for any reason, consideration will be given to those of the Stoke-on-Trent Corporation and the Swansea Corporation.

Mr. T. Williams: Will the Edinburgh-Leithcentral slaughterhouse be run by the municipality?

Sir R, Dorman-Smith: I should want notice of that question.

Captain Cazalet: Is there not to be an experimental slaughterhouse in the south of England?

Sir R. Dorman-Smith: Perhaps my hon. and gallant Friend will look at my answer which replies to that question.

Oral Answers to Questions — HERRING FISHING INDUSTRY.

Mr. Robert Gibson: asked the Minister of Agriculture whether he has considered the report of Mr. Sam Reid, Greenock, and Mr. G. W. B. Leslie, Sum-burgh, to the Herring Board, relative to spotting herring from the air; whether he has any statement to make on the success attending such spotting in relation to increased efficiency of the herring fishing industry; and whether he has reached a decision regarding the provision of a wireless-equipped aeroplane for this work?

Sir R. Dorman-Smith: I have not seen the report to which the hon. Member refers, but I am making inquiry of the Herring Industry Board on the subject, and also in regard to the last part of the question.

Mr. Gibson: Is the last part of the answer a reference only to the right hon. Gentleman's Department?

Sir R. Dorman-Smith: I am making the appropriate inquiries from the Herring Industry Board itself.

Oral Answers to Questions — WORKMEN'S COMPENSATION.

Mr. Ellis Smith: asked the Prime Minister whether he will move for. a Select Committee to consider the Government's proposals on the smaller points in connection with workmen's compensation on which they are prepared to legislate without waiting for the report of the Royal Commission, and in particular to deal with the question of an increase in the maximum amount of workmen's compensation payable and with silicosis, with a view to getting the maximum of agreement on a Measure, and so facilitating its passage through the House?

The Prime Minister: I am not aware of any particular proposals for workmen's compensation legislation which could advantageously or properly be referred to a Select Committee at the present juncture.

Mr. Smith: Does the Prime Minister remember that when the Royal Commission was set up he agreed to consider the need for an interim report, and will he consult the chairman of the Commission in order to get his views on this matter?

The Prime Minister: I think that has already been done. I would refer the hon. Member to the statement made by my right hon. Friend the Home Secretary on 11th May.

Mr. Gordon Macdonald: Did not the Home Secretary say on that occasion that the chairman of the Commission had no objection whatever, and since he has thus put the responsibility on the Government will they not undertake the introduce such legislation?

The Prime Minister: I do not think that was the sense of the statement to which I have referred.

Mr. Arthur Greenwood: Is it not the case that it is the opinion of this House that there are a number of specific questions which are ripe for immediate treatment, and is it not possible, without prejudice to the wider issues with which the Royal Commission is concerned, to introduce early legislation to deal with grievances and anomalies which the whole House admits exist to-day?

The Prime Minister: This question has been raised a number of times, and if the right hon. Gentleman will refer to the speech which I have mentioned he will see what the attitude of the Commission was.

Mr. E. Smith: In view of the extreme urgency of this matter and of the suffering which exists, will not the right hon. Gentleman reconsider his attitude?

Mr. Foot: Might not the Government carry out the recommendations of the last committee which inquired into this subject?

Oral Answers to Questions — OFFICIAL SECRETS BILL [Lords].

Captain W. T. Shaw: asked the Prime Minister whether it is the intention of the Government to pass the Official Secrets Bill [Lords] this Session?

The Prime Minister: Yes, Sir, we hope to deal with this Bill during the present Session.

Mr. Foot: Can the Prime Minister say whether it will come before the House before the Summer Adjournment?

The Prime Minister: No, Sir, I cannot.

Oral Answers to Questions — HIS MAJESTY'S SUBMARINE "THETIS" (INQUIRY).

Mr. Logan: asked the Prime Minister whether he will, at the conclusion of the "Thetis" Inquiry, circulate to the Members of the House, the verbatim report of evidence taken?

The Prime Minister: Until the report of the tribunal is received, I do not think it is possible to decide whether there would be justification for the expense of reproducing a large number of copies of the evidence.

Mr. Logan: Seeing that our voices have been stilled on account of this inquiry, and in view of the revelations which are taking place, is it not necessary that we shall have before us the true facts of the inquiry?

The Prime Minister: I do not want to prejudge that question, but I think the time to decide is when the report has been received.

Mr. Greenwood: In view of the very widespread public interest and the deep

national concern there is about this matter, would it not be advisable for the right hon. Gentleman, in order to allay any feelings there may be, to undertake-that the evidence shall be published with the report of Mr. Justice Bucknill?

The Prime Minister: I fully appreciate the point which the right hon. Gentleman makes, and, as I say, I am not prejudging the question at all, but I still think that it would be better to see what the report says.

Mr. Greenwood: While realising the necessity for, perhaps, withholding the results of the official and technical inquiry, would it not be in the public interest that nothing should be withheld from the public—with a view to avoiding a similar disaster in the future?

The Prime Minister: I will certainly keep that in mind.

Oral Answers to Questions — TELEPHONE SERVICE, GREENOCK.

Mr. R. Gibson: asked the Postmaster-General how many telephone junctions there are at the Greenock exchange connecting with Port Glasgow; whether he is aware that inconvenience and annoyance are experienced by Greenock subscribers owing to no such junctions being available when they wish to pass a call; and what steps he proposes to take to remedy the matter?

The Postmaster-General (Major Tryon): There are 12 junction circuits between the Greenock and Port Glasgow telephone exchanges. Normally there is no delay on calls in either direction but there are occasional heavy peaks of traffic, and to cope with these, two additional junctions are being provided.

Mr. Gibson: Does the right hon. and gallant Gentleman's Department intend to leave this matter until the automatic exchange is ready?

Major Tryon: No, Sir. These two additional services will be available by the end of July.

Oral Answers to Questions — RICHMOND PARK (HORSE RIDING).

Mr. Viant: asked the First Commissioner of Works whether he will give an assurance that the money voted by Parliament for the normal upkeep of royal parks


will not in future be used to make good damage and wear and tear caused by horse riding in Richmond Park, thereby impoverishing the general maintenance, but will arrange for any such costs to be met entirely by licence fees of horse riders?

The First Commissioner of Works (Mr. Ramsbotham): The licence fees which it is proposed to introduce are intended as a contribution towards the costof repairing the damage done by riding in the park generally and towards the maintenance of the riding track. The initial cost of forming the latter could hardly be met entirely by the proceeds of fees, which have purposely been fixed on such a scale as it is felt that riding masters and others are in a position to pay, but there should not be any considerable disproportion between the fees received and the cost of repairing wear and tear in the park and the maintenance of the track.

Mr. Macquisten: Before my hon. Friend reduces the cost to people who can afford horse riding, could he not reduce the charge for seats to the old figure of 1d. from the present extortionate charge of 2d.?

Oral Answers to Questions — HOUSE OF COMMONS' MAP ROOM DOOR.

Sir Herbert Williams: asked the First Commissioner of Works whether he will arrange to reopen the door from the Map Room to the Library corridor?

Mr. Ramsbotham: This door was blocked up a long while ago, having been made good on the Map Room side with panelling and shelves like the rest of the Map Room, and there is, within the original door on the corridor side, a recess containing a telephone for the use of the Library officials. In all the circumstances, I am doubtful whether any advantage would be gained by re-opening the door.

Oral Answers to Questions — CIVIL DEFENCE.

SHELTERS.

Mr. McEntee: asked the Lord Privy Seal whether the air-raid precautions officer in a London borough is to be permitted, after the Civil Defence Bill comes into operation, to examine and certify

plans for air-raid shelters in factories or commercial buildings?

The Lord Privy Seal (Sir John Anderson): Under Clause 14 (1) of the Civil Defence Bill the reports in regard to air-raid shelters made by the occupiers of factories are to be submitted to the factory inspector for the district, and those made by the owners of commercial buildings to the appropriate local authority. It will rest with the local authorities to decide which of their officers shall deal with those reports which are required to be submitted to them.

Mr. McEntee: Is the right hon. Gentleman aware that the Chief Factory Inspector has written to a factory owner who submitted plans to him:
In this case the proper authority for the submission of your scheme is the air-raid precautions officer";
and are we to understand that the airraid precautions officer is to succeed to the duty hitherto performed by the local engineer and surveyor?

Sir J. Anderson: I assume that that must be a mistake of the Air-Raid Pre cautions Department. I will look into the matter.

Mr. McEntee: asked the Lord Privy Seal whether when premises are occupied in their entirety by two separate limited companies, each having its own entirely separate factory within the building, they should submit reports and plans for airraid shelters for their staffs to the factory inspector or to the local authority for the district; and whether it is intended that the fact that more than one factory uses a single building should make such a factory building rank as a commercial building under the Civil Defence Bill?

Sir J. Anderson: The effect of Clause 89 of the Civil Defence Bill is that a building which contains a factory but is not occupied wholly by the occupier of that factory is regarded for the purposes of the Bill as a commercial building, and, if the building is one to which Part III of the Bill applies, the necessary reports will be furnished by the owner of the building to the local authority.

Mr. McEntee: Am I to understand from the right hon. Gentleman that if two factories, as in this case, are in the building, the building ceases to be a factory


and becomes a commercial building, and if that is so, will not everything be complicated all over the country?

Sir J. Anderson: Where there is more than one employer in the building the obligation under the Act is put not on the occupier but on the owner. That is the criterion. In the case of a factory which occupies one building the obligation is on the occupier. In the case of a composite building, whoever may be the occupier, the obligation is on the owner. This building is referred to as a commercial building and reports have to be sent to the local authority.

TENEMENT HOUSES. EDINBURGH.

Mr. Pethick-Lawrence: asked the Lord Privy Seal whether his attention has been drawn to the inadequacy of protection against air raids in the tenement houses in Edinburgh; and whether he has any proposals to make for improving the position?

Sir J. Anderson: Yes, Sir. I have given special consideration to this problem, and arranged for one of my senior technical advisers to pay a special visit to Edinburgh to discuss the matter on the spot with the city authorities. As a result, certain proposals have been evolved for providing shelter in these buildings, which I think will be found to be satisfactory; and the Regional Technical Officer of my Department has been instructed to discuss these proposals further with the local authority. Special steps will be taken to make known to the persons living in these buildings the measures proposed for providing them with air-raid shelter.

Mr. Foot: Does that apply only to Edinburgh, or will similar steps be taken in other places in Scotland where the same conditions apply?

Sir J. Anderson: What I have said applies only to Edinburgh, but other cities where there are similar conditions will be dealt with on similar lines.

Mr. Foot: Will they also be visited by an officer of the right hon. Gentleman's Department?

Sir J. Anderson: In the more important cases, yes.

Mr. Mathers: When the right hon. Gentleman is in Edinburgh, will he be

willing at the same time to see representatives of the local authorities near Edinburgh?

Sir J. Anderson: I shall do my best to meet the wishes of the local authorities.

Mr. Macquisten: Will the Lord Privy Seal's officers inspect Edinburgh Castle, where there are plenty of emplacements for anti-aircraft guns, which would reach all over the city and protect it?

STEEL SHELTERS (PRICES).

Mr. Stokes: asked the Lord Privy Seal whether he is aware that steel shelters are being sold to the public at a price averaging over £32 per ton delivered; that the price including a fair margin of profit should not exceed £15 per ton; and what steps he proposes to take to prevent the public being exploited in this manner?

Sir J. Anderson: I am not aware of the transactions to which the hon. Member refers. I have no power to control the prices at which such articles are sold to the public, but, if the hon. Member will send me full particulars, I shall be glad to consider whether there is any action I can usefully take.

Mr. Stokes: Is the right hon. Gentleman aware that the price has risen to £40 a ton since I put the question down?

Miss Rathbone: Will the right hon. Gentleman consider the advisability of establishing offices where householders whose incomes are above £250 can obtain extra advice, both as to the best method of protecting their houses and as to the proper prices to be paid?

Mr. Speaker: The question has to do with importations of steel.

Oral Answers to Questions — WAR RISKS (COMPENSATION AND INSURANCE).

Major Procter: asked the Lord Privy Seal whether, in the case of any buildings the roofs of which are used for gun emplacements, His Majesty's Government propose to pay compensation for any damage caused by enemy action?

The Financial Secretary to the Treasury (Captain Crookshank): I have been asked to reply. This question will be examined in connection with legislation which it may be necessary to introduce in


the event of an emergency arising. I cannot now anticipate the contents of such legislation.

Major Procter: Can the Financial Secretary tell us when he expects such legislation to be brought before the House?

Captain Crookshank: My hon. and gallant Friend cannot have heard what I said. I spoke of "legislation which may be necessary in the event of an emergency arising." I cannot give a date.

Sir Frank Sanderson: Is it not the case that in the recent crisis guns were placed on certain buildings?

Sir W. Davison: asked the Chancellor of the Exchequer whether he is aware that the assurance given by the Government that lessors and lessees of property shall be relieved from any obligation to repair war damage does not cover the position of freeholders who are unable to insure their property against war damage; and what action he proposes to take to meet this serious position in the case of large numbers of individuals, companies, and societies who have invested money in property or have purchased their homes through building societies or otherwise, as well as any mortgagees of such persons, companies, and societies?

Captain Crookshank: The action which the Government propose to take in this matter was set out in the statement which my right hon. Friend made on 31st January last.

Sir W. Davison: Is my right hon. and gallant Friend aware of the serious anxiety of large numbers of persons who have invested their savings in purchasing their own homes, and of the fact that the existing uncertainty is preventing the carrying out of large numbers of building schemes, which are of importance to the community? Is he further aware that there is very great difficulty in understanding what is the Government's policy? May I have an answer, as it is very important?

Captain Crookshank: I think that if my hon. Friend reads the statement of 31st January—

Sir W. Davison: I have.

Captain Crookshank: —he will find it, like all others made by the Chancellor, crystal clear.

Oral Answers to Questions — HOUSING (LAND ACQUISITION).

Mr. Tinker: asked the Minister of Health whether sanction has been granted to the Leigh Council, Lancashire, to erect 190 houses by direct labour off Warrington Road; whether the necessary 11 acres of land have been acquired, and at what price; and what was its rateable value previous to acquisition?

The Parliamentary Secretary to the Ministry of Health (Mr. Bernays): My right hon. Friend sanctioned a loan of £3,384 on 28th June, 1938, for the purchase by the Leigh Town Council of 11½acres at Warrington Road, Leigh, and in September last he agreed to the erection by direct labour of 186 houses thereon. The land formed part of a larger rateable hereditament, and, therefore, had no separate rateable value.

Sir H. Williams: On a point of Order. May I draw your attention, Mr. Speaker, to the fact that a number of questions are being asked on the subject of the rateable value of agricultural land, which has no rateable value? Is it necessary that the Paper should be occupied with questions which, obviously, are futile?

Mr. Parker: asked the Minister of Health whether Dagenham Corporation have now completed the purchase of some 16½ acres of land at Eastbrookend for housing purposes; if so, what price was paid; what was the actual area; what was its former use; and what was the rateable value previous to acquisition?

Mr. Bernays: Yes, Sir. The purchase of the land to which the hon. Member refers was completed in October last. The price paid was £6,317, and the area 16.8 acres. The land has been used for agricultural purposes, and has, consequently, no rateable value.

Mr. Stokes: Is the hon. Gentleman aware that that means paying £400 an acre for agricultural land?

Oral Answers to Questions — NEW ZEALAND.

69. Mr. E. Smith: asked the Secretary of State for Dominion Affairs whether he can now make a further statement on


the consultations and negotiations that have been held between representatives of the Government, the Bank of England, and Mr. Walter Nash, the Finance Minister of New Zealand; what has been the Government's policy in this matter; and what action has been or will be taken?

The Secretary of State for Dominion Affairs (Sir Thomas Inskip): Discussions with Mr. Nash are still in progress, and I am not yet in a position to make a statement in regard to them.

Oral Answers to Questions — ROYAL NAVY.

Marriage Allowances.

Mr. T. Smith: asked the Parliamentary Secretary to the Admiralty whether, as is the case with the Militia, marriage allowances are payable to all ratings of the Navy from the age of 20?

The Civil Lord of the Admiralty (Colonel Llewellin): Yes, Sir.

TORPEDO FACTORY, GREENOCK (RETIRING AGE).

Mr. R. Gibson: asked the Parliamentary Secretary to the Admiralty whether the extension of the retiring age for ex-servicemen in non-pensionable employment in the Royal Naval torpedo factory, Greenock, from 60 to 65 years of age, is also applicable to persons other than ex-servicemen; and what are the conditions attached to such extension?

Colonel Llewellin: There has been no general change in Admiralty regulations which provide that workpeople are pensioned or discharged on reaching 60 years of age if their services are no longer required. Extensions on a yearly basis may, however, be made up to 65 years in approved cases subject to health and efficiency remaining satisfactory.

Mr. Gibson: Does that apply both to ex-service men and to men who are not ex-service men?

Colonel Llewellin: Yes, Sir; both are dealt with on exactly the same basis.

ALL HALLOWS CHURCH, LOMBARD STREET (SALE OF SITE).

Mr. Thorne: asked the hon. Member for Central Leeds, as representing the Ecclesiastical Commissioners, if he can

now say whether the site of the demolished All Hallows Church, in Lombard Street, E.C., has been sold; and, if so, at what price?

Mr. Denman (Second Church Estates Commissioner): The sale of the site in question forms part of a larger transaction which it is hoped will be completed in the autumn. Even if the sum payable for that site had been separately ascertained, the Commissioners would not feel justified in disclosing details of transactions affecting the private interests of others, except as required for their annual report to Parliament.

SECONDARY SCHOOL, CONSETT.

Mr. David Adams: asked the Parliamentary Secretary to the Board of Education whether it is intended to grant per mission for the erection of a new secondary school at Consett, agreed to in principle in 1937, the existing school buildings having been the subject of condemnatory reports by His Majesty's inspectors in 1923 and in 1933, and which premises are urgently required for their original purpose, that of a technical institute?

Captain Dugdale (Lord of the Treasury): This proposal is under consideration together with a number of other proposals to provide new secondary school premises in the county of Durham, and it is hoped to give a decision shortly.

Mr. Adams: In view of the fact that in some cases months have elapsed before replies have been received by the council from the Board, can we have a definite assurance that the matter will now be promptly dealt with?

Captain Dugdale: I am not in a position to add to the reply I have given.

Mr. Adams: Will the hon. and gallant Gentleman let me know?

Oral Answers to Questions — BRITISH ARMY.

SUPPLEMENTARY RESERVE OFFICERS (REVOLVERS).

74. Mr. T. Smith: asked the Secretary of State for War whether he is aware that officers in the Royal Tank Regiment, Supplementary Reserve, have been ordered to purchase a pistol-revolver out of their


original grant; and, as in certain cases this is a hardship, whether he will consider the revision of the grant?

The Financial Secretary to the War Office (Sir Victor Warrender): I am not
aware of any such order. An officer of the Supplementary Reserve is not required to purchase a revolver.

Mr. Smith: Is the hon. Baronet trying to tell me that is is not aware of the order when I have it in my hand? Does he appreciate that this grant was spent, in many cases, years ago; and would it not be more businesslike, if revolvers are needed by officers, that they should be supplied from the War Office?

Sir V. Warrender: That is what I have tried to tell the hon. Gentleman. I am not aware of any such order.

Mr. Greenwood: Is it not the case that members of the Supplementary Reserve and so on are being called upon to enter into financial obligations which they never anticipated when they first joined?

Sir V. Warrender: This question only deals with revolvers. Revolvers can be stored and issued on mobilisation, and officers will not be required to provide them.

MARRIAGE ALLOWANCES.

Mr. T. Smith: asked the Secretary of State for War whether, as is the case with the Militia, marriage allowances are payable to all other ranks over the age of 20?

Sir V. Warrender: Yes, Sir.

HOURS OF WORK (YOUNG PERSONS).

Mr. Ridley: asked the Secretary of State for the Home Department whether any applications made under Section 71 of the Factory Act, 1936, have been declined; and, if so, to what industries the applications were related?

The Under-Secretary of State for the Home Department (Mr. Peake): I would refer the hon. Member to the full reply given to the hon. Member for the Western Division of Fifeshire (Mr. Gallacher) on 29th June.

Mr. Ridley: asked the Home Secretary how many young persons are

covered by each of the draft orders now issued under Section 71 of the Factory Act, 1939, relating to the cotton, woollen and carpet industries?

Mr. Peake: The three industries mentioned are dealt with in one set of draft Regulations, and, except for young persons who are already in employment when the Regulations come into operation, they apply only to young persons of 15 years of age and over. According to the reports of the inquiries there are 38,190 young persons under 16 employed in these industries, and it is estimated that of this number about 23,000 will be between 15 and 16. Of these, 12,530 are in cotton; 8,570 in woollen and worsted; and 1,800 in carpets.

Mr. Ridley: Is the hon. Gentleman aware that these figures will be a very considerable disappointment to many Members of the House? Is he further aware that, when this provision was inserted in the Factories Bill giving the Secretary of State power to extend the hours from 44 to 48 in the case of young people between the ages of 14 and 16, it was regarded as a power to be used only in very special and exceptional circumstances; and can we have an assurance that its use will not be continued in such a fashion that it becomes general, instead of being, as it should be, particular and special?

Mr. Peake: As the hon. Member is aware, these regulations have to be laid before Parliament, and, of course, when they are, they can be fully discussed.

Oral Answers to Questions — OLD AGE PENSIONS.

Mr. Tinker: asked the Chancellor of the Exchequer whether his attention has been drawn to a resolution carried at the mineworkers' conference at Swansea, a copy of which has been sent to him, asking him to consider a resolution carried unanimously to increase old age pensions to £1 a week; and what answer he has returned to this opinion, expressed on behalf of 500,000 organised workers in the mines?

Captain Crookshank: The hon. Member has been good enough to send my right hon. Friend an extract from a newspaper referring to this resolution. The Government's views on this matter were


explained during the Debate on 23rd November last.

Mr. Tinker: Will the Government be moved at all by pressure from outside? All over the country there is an agitation going on for something to be done. What amount of pressure will compel the Government to move?

Mr. Foot: Is it the fact that the Government's views on this matter will remain unchanged until just before the General Election?

Oral Answers to Questions — TRANSPORT.

LEVEL CROSSINGS, LONDON.

Mr. R. C. Morrison: asked the Minister of Transport how many level crossings within the Metropolitan Police area have been abolished during the past five years; will he give particulars of crossings over the London and North-Eastern Railway lines within that area which have been abolished, and also those scheduled for abolition in the immediate future?

The Parliamentary Secretary to the Ministry of Transport (Captain Austin Hudson): No level crossings within the Metropolitan Police area have been abolished during the last five years. Six level crossings on the Loughton branch of the London and North-Eastern Railway and one on the main line at Green Street, Enfield, will be abolished in the immediate future. Proposals for the abolition of the level crossings at South Street, Enfield, and over the Southern Railway at Kingston Road, Merton, are also under consideration by the highway authorities concerned, but I cannot say when a decision to proceed will be reached.

Mr. Morrison: Would the hon. and gallant Gentleman bring pressure to bear on the London and North Eastern Railway Company in respect of those crossings within the Metropolitan Police area, which arc very dangerous?

Captain Hudson: I wish that the abolition of level crossings could be expedited, but we are giving a special grant of 75 per cent. and doing all we can to get the local authorities to deal with the matter.

Mr. Morrison: Would the hon. and gallant Gentleman take note of the fact that, whereas a great many have been abolished

throughout the country, none at all have been abolished during the past five years in the Metropolitan Police area?

ROAD SCHEMES (LAND VALUES).

Mr. Stokes: asked the Minister of Transport what steps he proposes to take in order to secure for the benefit of the community the greatly enhanced land values which will accrue as a result of the expenditure of £106,000,000 of public money on road schemes already approved by the Ministry of Transport for execution during the next live years?

Captain Hudson: A highway authority, requiring land for the construction or improvement of a road, may acquire it under Section 13 of the Restriction of Ribbon Development Act, 1935, and, if they are unable to do so by agreement, on terms which are in their opinion reasonable, they may purchase the land compulsorily. The compensation is then fixed by an arbitrator, who is directed by the Act to have regard to the extent to which the remaining contiguous lands belonging to the same person may be benefited by the purpose for which the landis acquired, and, in particular, in the case of land acquired for the widening of a road, set off against the value of the land acquired any increase in the value of other land belonging to the same person which will accrue by reason of the creation of a frontage to the road as widened.

Mr. Stokes: May I ask the Minister to answer the question? The answer he has given is entirely beside the point. Does he not think it is quite time that a tax on land values was introduced?

Captain Hudson: What I said was that we do take into consideration the increase of values as a result of any widening of the roads.

Mr. Macquisten: Is there not power in the 1909 Act to acquire the land alongside?

ELECTRICITY SUPPLY (RURAL AREAS).

Mr. J. Morgan: asked the Minister of Transport what stage has been reached in the negotiations between local authorities and electricity companies concerning a scheme for establishing a fund to assist rural electrification?

Captain Hudson: The Electricity Commissioners have no information in regard to such negotiations.

Mr. Morgan: If I tell the hon. and gallant Gentleman that the County of London Electricity Supply Company have told me that they are taking part in such an inquiry, will he look into the matter further?

Captain Hudson: I shall be very glad to have any information that the hon. Member can give me.

BUSINESS OF THE HOUSE.

Mr. Greenwood: May I ask the Prime Minister how far he proposes to go with the business on the Order Paper in the event of the suspension of the Eleven o'Clock Rule?

The Prime Minister: It is proposed to take the business up to and including the third Order on the Paper. It is also proposed to take the Report stage of the Milk Industry (Payments), Money Resolution, and the Ways and Means Resolution relating to the London Government Bill, which are exempted business.

Mr. Greenwood: May I put to the right hon. Gentleman this further point, which I raised on Thursday on the question of business. Assuming that the first Order

requires a somewhat long debate and that there are substantial points on the Amendments in another place to the Civil Defence Bill, would it not be unreasonable to take the Amendments from another place on the Ministry of Supply Bill, which include one issue of substantial importance?

The Prime Minister: I am sure the right hon. Gentleman recognises that I am never unreasonable. We have a great deal of business to get through, but we do not want the House to have to sit unduly late, and we will see how we get on.

Mr. Greenwood: If the Prime Minister is informed through the usual channels that the House is, in fact, likely to sit unduly late, will his sweet reasonableness then begin to operate?

The Prime Minister: I shall be very happy for consultations to take place through the usual channels.

Mr. Thorne: The Prime Minister says that he is never unreasonable. Will he tell us when the General Election is to be?

Motion made, and Question put,

"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)." —[The Prime Minister.]

The House divided: Ayes, 229; Noes, 113.

Division No. 224.]
AYES.
[3.58 p.m.


Acland-Troyte, Lt.-Col. G. J.
Butcher, H. W.
Dugdale, Captain T. L.


Adams, S. V. T. (Leeds, W.)
Butler, Rt. Hon. R. A.
Duncan, J. A. L.


Albery, Sir Irving
Caine, G. R. Hall-
Eden, Rt. Hon. A.


Alexander, Brig.-Gen. Sir W.
Campbell, Sir E. T.
Edmondson, Major Sir J.


Allan, Col. J. Sandeman (B'knhead)
Cartland, J. R. H.
Elliot, Rt. Hon. W. E.


Anderson, Rt. Hn. Sir J. (So'h Univ's)
Cayzer, Sir C. W. (City of Chester)
Ellis, Sir G.


Anstruther-Cray, W. J.
Cazalet, Thelma (Islington, E.)
Elliston, Capt. G. S.


Aske, Sir R. W.
Cazalet, Capt. V. A. (Chippenham)
Emrys-Evans, P. V.


Assheten, R.
Chamberlain, Rt. Hn. K. (Edgb't'n)
Entwistle, Sir C. F.


Baldwin-Webb, Col. J.
Channon, H.
Errington, E.


Balfour, Capt. H. H. (Isle of Thanet)
Chapman, A. (Rutherglen)
Erskine-Hill, A. G.


Barrie, Sir C. C.
Chapman, Sir S. (Edinburgh, S.)
Evans, Colonel A. (Cardiff, S.)


Baxter, A. Beverley
Churchill, Rt. Hon. Winston S.
Findlay, Sir E.


Beauchamp, Sir B. C.
Clydesdale, Marquess of
Fleming, E. L.


Beaumont, Hon. R. E. B. (Portsm'h)
Cobb, Captain E. C. (Preston)
Fox, Sir G. W. G.


Bail. Sir A. L.
Colville, Rt. Hon. John
Fremantle, Sir F. E.


Bennett, Sir E. N.
Conant, Captain R. J. E.
Furness, S. N.


Bernays, R. H.
Cooke, J. D. (Hammersmith, S.)
Gilmour, Lt.-Col. Rt. Hon. Sir J.


Bird, Sir R. B.
Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Cluckstein, L. H.


Bottom, A. C.
Croft, Brig.-Gen. Sir H. Page
Glyn, Major Sir R. G. C.


Boulton, W. W.
Crookshank, Capt. Rt. Hon. H. F. C.
Graham, Captain A. C. (Wirral)


Bower, Comdr. R. T.
Crowder, J. F. E.
Grant-Ferris, Flight-Lieutenant R.


Broadbridge, Sir G. T.
Culverwell, C. T.
Granvilli, E. L.


Brooke, H. (Lewisham, W.)
Daviton, Sir W. H.
Grattan-Doyle, Sir N.


Brown, Rt. Hon. E. (Leith)
De la Bère, R.
Gridley, Sir A. B.


Brown, Brig.-Gen. H. C. (Newbury)
Denman, Hon. R. D.
Grigg, Sir E. W. M.


Browne, A. C. (Belfast, W.)
Denville, Alfred
Grimston, R. V.


Bull, B. B.
Doland, G. F.
Guinness, T. L. E. B.


Bullook, Capt. M.
Donner, P. W.
Gunston, Capt. Sir D. W.


Burgin, Rt. Hon. E. L.
Dorman-Smith, Col. Rt. Hon. Sir R. H.
Hacking, Rt. Hon. Sir D. H.


Burton, Col. H. W.
Drewe, C.
Hannah, I. C.




Hannon, Sir P. J. H.
Mitchell, H. (Brentford and Chiswisk)
Simmonds, O. E.


Haslam, Henry (Horncastle)
Mitchell, Sir W. Luna (Streatham)
Simon, Rt. Hon. Sir J. A.


Hely-Hutchinson, M. R.
Moore, Lieut.-Col. Sir T. C. R.
Smith, Bracewell (Dulwich)


Heneage, Lieut.-Colonel A. P.
Moore-Brabazon, Lt.-Col. J. T. C.
Smith, Sir R. W. (Aberdeen)


Hepburn, P. G. T. Buchan-
Moreing, A. C.
Smithers, Sir W.


Hepworth, J.
Morrison, G. A. (Scottish Univ's.)
Somerville, Sir A. A. (Windsor)


Hoare, Rt. Hon. Sir S.
Muirhead, Lt.-Col. A. J.
Southby, Commander Sir A. R. J.


Hogg, Hon. Q. McG.
Nail, Sir J.
Spears, Brigadier-General E. L.


Howitt, Dr. A. B.
Nicolson, Hon. H. G.
Strauss, H. G. (Norwich)


Hudson, Capt. A. U. M. (Hack., N.)
O'Connor, Sir Terence J.
Strickland, Captain W. F.


Hudson, Rt. Hon. R. S. (Southport)
O'Neill, Rt. Hon. Sir Hugh
Stuart, Hon. J. (Moray and Nairn)


Hulbert, Squadron-Leader N. J.
Orr-Ewing, I. L.
Sueter, Rear-Admiral Sir M. F.


Hume, Sir G. H.
Palmer, G. E. H.
Sutcliffe, H.


Hunloke, H. P.
Peake, O.
Tasker, Sir R. I.


Hunter, T.
Peat, C. U.
Thomas, J. P. L.


Hurd, Sir P. A.
Pickthorn, K. W. M.
Thomson, Sir J. D. W.


Inskip, Rt. Hon. Sir T. W. H.
Pilkington, R.
Thorneycroft, G. E. P.


Jennings, R.
Plugge, Capt. L. F.
Thornton-Kemsley, C. N.


Keeling, E. H.
Ponsonby, Col. C. E.
Titchfield, Marauess of


Kerr, Colonel C. I. (Montrose)
Porritt, R. W.
Touche, G. C.


Kerr, H. W. (Oldham)
Pownall, Lt.-Col. Sir Assheton
Tryon, Major Rt. Hon. G. C.


Kerr, Sir John Graham (Soo'sh Univs.)
Procter, Major H. A.
Tufnell, Lieut.-Commander R. L.


Keyes, Admiral of the Fleet Sir R.
Purbrick, R.
Wakefield, W. W.


Lamb, Sir J. Q.
Raikes, H. V. A. M.
Walker-Smith, Sir J.


Lambert, Rt. Hon. G.
Ramsbotham, Rt. Hon. H.
Wallace, Capt. Rt. Hon. Euan


Lancaster, Lieut.-Colonel C. G.
Rankin, Sir R.
Ward, Lieut.-Col. Sir A. L. (Hull)


Leech, Sir J. W.
Rathbone, Eleanor (English Univ's.)
Ward, Irene M. B. (Wallsend)


Leighton, Major B. E. P.
Rawson, Sir Cooper
Warrender, Sir V.


Lewis, O.
Reed, A. C. (Exeter)
Watt, Lt.-Col. G. S. Harvie


Lipson, D. L.
Reed, Sir H. S. (Aylesbury)
Wedderburn, H. J. S.


Liewellin, Colonel J. J.
Raid, W. Allan (Derby)
Whiteley, Major J. P. (Buckingham)


Lloyd, G. W.
Renter, J. R.
Wickham, Lt.-Col. E. T. R.


Locker-Lampson, Comdr. O. S.
Rickards, G. W. (Skipton)
Williams, C. (Torquay)


Mabane, W. (Huddersfield)
Ropner, Colonel L.
Williams, H. G. (Croydon, S.)


Macdonald, Capt. P. (Isle of Wight)
Royds, Admiral Sir P. M. R.
Wilson, Lt.-Col. Sir A. T. (Hitchin)


McEwen, Capt. J. H. F.
Russell, Sir Alexander
Windsor-Clive, Lieut.-Colonel G.


Macmillan, H. (Stockton-on-Tees)
Russell, S. H. M. (Darwen)
Winterton, Rt. Hon. Earl


Macnamara, Lieut.-Colonel J. R. J.
Salmon, Sir I.
Womersley, Sir W. J.


Macquisten, F. A.
Salt, E. W.
Wood, Hon. C. I. C.


Maitland, Sir Adam
Salter, Sir J. Arthur (Oxford U.)
Wood, Rt. Hon. Sir Kingsley


Makins, Brigadier-General Sir Ernest
Samuel, M. R. A.
Wright, Wing-Commander J. A. C.


Margesson, Capt. Rt. Hon. H. D. R.
Sandeman, Sir N. S.
Young, A. S. L. (Partick)


Markham, S. F.
Sanderson, Sir F. B.



Marsden, Commander A.
Schuster, Sir G. E.
TELLERS FOR THE AYES.—


Meller, Sir R. J (Mitcham)
Scott, Lord William
Captain Waterhouse and Mr. Munro.


Mellor, Sir J. S. P. (Tamworth)
Selley, H. R.



Mills, Sir F. (Leyton, E.)
Shaw, Captain W. T. (Forfar)





NOES.


Adams, D. (Cornett)
Frankel, D.
Maxton, J.


Adam, D. M. (Poplar, S.)
Gallacher, W.
Milner, Major J.


Adamson, Jennie L. (Dartford)
Gardner, B. W.
Montague, F.


Adamson, W. M.
George, Major G. Lloyd (Pembroke)
Morgan, J. (York, W.R., Doneasler)


Alexander, Rt. Hon. A. V. (H'lsbr.)
Gibson, R. (Greenock)
Morrison, R. C. (Tottenham, N.)


Ammon, C. G
Green, W. H. (Deptford)
Naylor, T. E.


Banfield, J. W.
Greenwood, Rt. Hon. A.
Noel-Baker, P. J.


Barnes, A. J.
Grenfell, D. R.
Paling, W.


Batey, J.
Griffith, F. Kingsley (M'ddl'sbro, W.)
Parker, J.


Bellenger, F. J.
Griffiths, G. A. (Hemsworth)
Pearson, A.


Benn, Rt. Hon. W. W.
Grovel, T. E.
Pethick-Lawrnce, Rt. Hon. F. W.


Benson, G.
Guest, Dr. L. H. (Islington, N.)
Poole, C. C.


Bevan, A.
Hall, G. H. (Aberdare)
Ridley, G.


Brown, C. (Mansfield)
Hall, J. H. (Whiteehapel)
Ritson, J.


Burke, W. A.
Hardie, Agnes
Roberts, W. (Cumberland, N.)


Chater, D.
Harris, Sir P. A.
Rothschild, J. A. de


Cluse, W. S.
Hayday, A.
Sanders, W. S.


Collindridge, F.
Henderson, A. (Kingiwinfard)
Seely, Sir H. M.


Cripps, Hon. Sir Stafford
Henderson, T. (Tradeston)
Silkin, L.


Daggar, G.
Hills, A. (Pontefract)
Silverman, S. S.


Dalton, H.
Hopkin, D.
Sinclair, Rt. Hon. Sir A. (C'thn's)


Davidson, J. J. (Maryhill)
Jagger, J.
Smith, Ben (Rotherhlthe)


Davies, R. J. (Westhoughton)
Jenkins, A. (Pontypool)
Smith, E. (Stoke)


Davies, S. O. (Merthyr)
Kennedy, Rt. Hon. T.
Smith, Rt. Hon. H. B, Lees- (K'ly)


Day, H.
Leach, W.
Smith, T. (Normanton)


Dobbie, W.
Lea, F.
Sorensen, R. W.


Dunn, E. (Rother Valley)
Leslie, J. R.
Stephen, C.


Ede, J. C.
Logan, D. G.
Stewart, W. J. (H'ght'n.le-Sp'ng)


Edwards, Sir C. (Bedwelty)
Lunn, W.
Stokes, R. R.


Edwards, N. (Caerphilly)
Macdonald, G. (Ince)
Strauss, G. R. (Lambeth, N.)


Evans, D. O. (Cardigan)
MaEntee, V. La T.
Summerskill, Dr. Edith


Evans, E. (Univ. of Wales)
MeGhee, H. G.
Taylor, R. J. (Morpeth)


Fletcher, Lt.-Comdr. R. T. H.
MacLaren, A.
Thorne, W.


Foot, D. M.
Mainwaring, W. H.
Thurtle, E.







Tinker, J. J.
Williams, E. J. (Ogmore)
Woods, G. S. (Finsbury)


Vianl, S. P.
Williams, T. (Don Valley)



Walter, J.
Wilmot, John
TELLERS FOR THE NOES.—


Walkini, F. C.
Wilson, C. K. (Attercliffo)
Mr. Charleton and Mr. Mathers.


Whiteley, W. (Blaydon)
Windsor, W. (Hull, C.)

BOOTLE CORPORATION BILL [Lords].

Reported, with Amendments, from the Committee on Unopposed Bills (with Report on the Bill).

Bill, as amended, and Report to lie upon the Table; Report to be printed.

ARMY (SUPPLEMENTARY ESTIMATES, 1939).

Estimate presented, —of a further Sum required to be voted for the Army for the year ending 31st March, 1940 [by Command]; referred to the Committee of Supply, and to be printed. [No. 148.]

Orders of the Day — BRITISH OVERSEAS AIRWAYS BILL.

Order for Second Reading read.

4.6 p.m.

The Secretary of State for Air (Sir Kingsley Wood): I beg to move, "That the Bill be now read a Second time."
The House may recall that at the end of last year I announced that the Government had reached the conclusion that the most satisfactory instrument for the development of overseas civil aviation would be provided by the association of Imperial Airways and British Airways in a single public corporation. I have told the House from time to time how the negotiations have been proceeding, and on 12th May I read a statement that agreement had been reached and that in due course I should be bringing the matter before the House for the necessary approval. In the first place the main reason for the Government's proposal is the real necessity for advancing our position in reference to civil aviation overseas, and I believe that in the proposals contained in the Bill we have not only a sound plan, but greater possibilities of progress, and particularly what I think is so much needed, the development of a far-sighted, long-range policy in British aircraft production. I am satisfied that this cannot be attained in face of the development of the heavily subsidised competition of to-day by private companies, which must quite properly have regard to the primary interests of the shareholders who own such companies. I submit that under the new corporation national interests and national advance will come first. There are also great advantages in the unification of the two companies, such as the pooling of experience, equipment, ground organisation and technical resources. Again I would say that much also can undoubtedly be accomplished and achieved by the centralised control of the fleet, the training of personnel and the concentration of management and forward planning.
It may be truly said that there are dangers in a monopoly, but there will in fact be severe competition, both as regards the carriage of passengers and

freight to and from the Continent of Europe and on the Empire and other long-distance routes, with the unified and heavily subsidised national air lines of other countries. It is true that it may be urged, for instance, that America encourages competition, but it has also to be rememberedthat successful companies like Air France, K.L.M., D.L.H., Sabena, and Swiss Air have long ago adopted the policy of concentration and State aid, so far as their overseas services are concerned, which is in fact contained in the Government proposal; and all those countries have adopted one chosen instrument for their purpose. I might also use the argument that effective competition in civil transport is, in fact, nowadays international. It is in fact between national organisations.
Again it must be remembered that competition between United Kingdom subsidised air-line operators on the same route has already been tried and has failed. The Hambling Committee in 1923 showed that competition between companies which are receiving subsidies from the same Government meant in effect that the Government was competing with itself, and it was the obvious objection to this which gave rise to the setting up of Imperial Airways in 1924. Again, true competition between Imperial Airways with their long haul Empire schemes, and British Airways with their concentration on the short haul European services would, as it would appear to me, never have been possible. The proposals in the Bill do not in fact kill competition between these two concerns, because in my judgment it would never have existed in reality.
I, therefore, suggest as my first point this afternoon that the Government are right in the proposals they have brought forward, and that it is more efficient and will make for greater progress to concentrate our available assistance in one large organisation and rely mainly on international competition to provide the necessary stimulus for progress and efficiency. So far as the future success of this corporation is concerned, I agree that a great deal will depend, as in any other similar organisation, upon the scope of its work and the vision and enterprise of its management. So far as the scope of the corporation's work is concerned, the House will see that under Clause 2 of the Bill the Mandate to the corporation is:


To secure the fullest development consistent with economy of efficient overseas air transport services.
A much wider interpretation of its objects than that, for instance, which is given to Imperial Airways, which is:
To use its best endeavours to make its service self-supporting at the earliest possible moment.
I suggest that with increased funds and always with the aim before it of securing the fullest development of air transport, there is little doubt that the corporation can secure important advances in civil aviation, and at the same time provide reasonable charges to the public.
I have observed what I suggest has been legitimate criticism of past policy. We have, perhaps of necessity, put the emphasis on cheap flying rather than on real aeronautical progress. With the new corporation and a broad and progressive policy, coupled with increased financial provision, of which I shall say something later, this country should, under these proposals now be enabled to take a big step forward, particularly in relation to our types of civil aircraft and the development of British overseas services generally.
There is another reason for this proposal. There is the important consideration of finance, In no country in the world to-day is aviation within measurable distance of paying for itself. All national operating companies are heavily subsidiscd by their Governments. So far as we are concerned, under the Air Navigation Act, passed last year, the statutory limit on the aggregate amount of British subsidies was increased to £3,000,000 per annum, and it was intended, as the House knows, to devote the greater part of this to overseas development. Therefore, large additional payments would fall to be made to the companies selected by the Government for this purpose. Another important aspect of the financial side of this matter was referred to by the Cadman Committee, who expressed the opinion that the subsidies granted to air transport companies should not be used for raising dividends to undue levels. They also added that it was desirable to take steps to ensure that the large additional capital needed for development should be raised on terms which would not prove unduly expensive to the Exchequer.
Both the two chosen instruments, Imperial Airways and British Airways, have large and desirable schemes of expansion in view, which require a big increase in their capital resources. It is, obviously, in the public interest that the additional capital required shall be raised and remunerated on the most economical terms. I do not hesitate to say that this can without doubt be best secured by the issue of stock with a Treasury guarantee. In fact, neither of the two operating companies could raise the capital that is needed for replacement and new equipment except on onerous terms. If present arrangements continued, the taxpayers might well have to pay increasing sums to provide interest on capital. That is certainly not the best finance, nor does it make for progress in civil aviation. The new corporation is accordingly enabled to borrow by the issue of airways stock, the principal and interest being guaranteed by the Treasury, both for the funds for the purchase of the two undertakings and the additional capital that is required for further expansion. The total amount which it is proposed can be borrowed at one time is fixed as not exceeding £10,000,000, and it will probably be necessary to issue about £7,000,000 of stock, in the first instance.

Mr. Pethick-Lawrence: I think the right hon. Gentleman said that the total amount to be issued at any one time could not exceed £10,000,000. Surely, what he meant was not the amount to be issued at one time, but the total is to be £10,000,000.

Sir K. Wood: I am obliged to the right hon. Gentleman for his correction. That is quite correct. Of the £7,000,000 which it is suggested we should have to issue in the first instance, £3,500,000 will be required for purchase and £3,500,000 as further capital which the corporation will require for immediate development, the principal item being the purchase of new aircraft. The Bill also provides, in Clause 28, that subsidies should be paid to the corporation until December, 1953, and that the total amount of subsidies payable in any year may not exceed £4,000,000, less the £100,000 earmarked until the end of 1943 for the assistance of internal air lines. I have stated that the previous subsidy laid down in the Air Navigation Act was £3,000,000 a year, a figure never yet reached, but more money


will undoubtedly be needed to finance the extensive programme of overseas air services now being planned, and the amount is now being increased by £1,000,000 per annum.
The corporation will, or course, continue the overseas air services now being run by the constituent companies. Arrangements are also already in contemplation for the institution of new services in various parts of the world, the chief of which are extended services in Europe, the Trans-Tasman service, the service across the North Atlantic and the service to West Africa and across the South Atlantic. A Trans-Pacific service is also in contemplation.

Colonel Arthur Evans: Can my right hon. Friend say what provision there is in the Bill to develop inter-island services in the West Indies?

Sir K. Wood: In addition to the financial provisions which I have explained, there are one or two others of some importance. Until "the appointed day" on which the corporation will take over the existing undertakings, they are being carried on by the existing companies, under the present contractual arrangement, subject to certain limitations on the powers of the existing companies which are contained in the provisional contracts of sale, which are set out in the Second Schedule to the Bill. Between "the appointed day" and the 31st March, 1941, the corporation will be paid subsidy based on the actual deficiency arising on the operation of existing services and such new services as may be inaugurated with my approval, or at my direction.
After the initial period, the financial arrangements will be based on three-year periods. This will give considerable scope to the new corporation and enable them to plan well ahead. They will prepare in respect of any such periods a programme of the services which they propose to undertake, together with an estimate of the cost, for the consideration of the respective Departments. This new method' will also avoid the delays which have been inherent in our present system, which entailed the assessment of expenditure peculiar to a particular service, and also necessitated the separate and elaborate allocation of types of expenditure

common to the whole of the activities of the companies now receiving subsidies.
Another important provision is made in Clause 16, which enables the corporation to place to the credit of its own general reserve account any excesses of revenue or savings in expenditure achieved as a result of efficient administration. By this means the new body will be enabled to build up a reserve which should provide a further stimulus for increasing efficiency and progress throughout the whole organisation. This fund will be at the disposal of the management, subject to one condition, that when the account reaches the sum of one-tenth of the cost of the corporation's assets, then one-half of any excess over that figure will be remitted to the Exchequer.
I should like now to say a few words about the price that we have paid for these two concerns, but before dealing with the question of price I wish to make one point clear to the House, and that is the personal position of my hon. and gallant Friend the Under-Secretary, who before his appointment to his present office was a director of British Airways. On being appointed, in accordance with practice, he immediately severed his connection with, and divested himself of all interests in, British Airways, or any other aviation concern. When the merger was first projected and became the subject of discussion, within the Department and with the companies concerned, my hon. and gallant Friend asked particularly that he should be allowed to take no part in the price negotiations. To this, of course, I agreed.

Mr. Montagu: Will the right hon. Gentleman say what he means by the corporation placing to reserve the results of special efficiency? I do not quite follow what that means.

Sir K. Wood: That was not quite the expression I used. I will repeat what I said. This is a provision which enables the corporation to place to the credit of its own general reserve account any excesses of revenue or savings in expenditure achieved as a result of efficient administration. When that has been placed to reserve, then it will be at the disposal of the corporation, subject to the condition that when the account reaches the sum of one-tenth of the cost of the


corporation s assets, one-half of any excess over that figure will be remitted to the Exchequer. The provisional contracts for the acquisition of the two undertakings are set out in the Schedule to the Bill.
The price of the undertaking of Imperial Airways was fixed as at 31st March, 1938, and the price of the undertaking of British Airways was fixed as at 30th September, 1938. These dates were selected because they were the latest dates up to which the undertakings had produced completed accounts, and the dates at which the professional accountants employed by the Government, Messrs. Thomson, McLintock and Company, had made their examination of the assets and liabilities. I have already informed theHouse of the general basis upon which the prices of the two undertakings were agreed. They were arrived at after protracted negotiation, with the advice of the Treasury and a careful and detailed investigation by the accountants; and certainly, the Government believe them to be fair and reasonable. So far as Imperial Airways are concerned, the amount proposed will permit of the payment to the shareholders of 32s. 9d. for each ordinary share of £1, and this sum will amount to £2,659,085. Interest will be allowed on the purchase price at the rate of 4 per cent. per annum less Income Tax, as from 31st March, 1938, to date of payment. That interest may be said to represent a payment of 3½per cent. for the use of the shareholders' money and ½ per cent. for the company's managerial services in consideration of the fact that the company will pay no dividend after the date at which the price was fixed, namely, 31st March, 1938.

Mr. Benson: May I ask whether in the price there is anything or nothing for the deferred shares held by the Government?

Sir K. Wood: I am going to deal with that point. The date of actual payment will be the date fixed under the Bill as the appointed day for the transfer to the corporation of the undertakings of the two companies. The terms of sale were approved at a shareholders meeting of Imperial Airways on 22nd May, 1939. The issued share capital of the company is £1,623,869 of £1 ordinary shares each fully paid, and £25,000 of deferred shares of £1 each fully paid. The deferred shares are held by the Air Ministry in

recognition of the Department's interest in the company, having regard to the subsidies which have been paid, and as any price paid for them would come back to the Air Ministry they were not taken into account in relation to the purchase price. The assessment of the price was arrived at by an examination of the value to be placed on the assets of the company as at 31st March, 1938, and on the amount of liabilities to be deducted, so that a fair value of the net tangible assets could be obtained. This value, together with any value to be attached to goodwill, development expenditure, and other tangible assets would represent the value of the company's undertaking at that date. The value of the net tangible assets at 31st March, 1938, was computed at £2,484,643. The development expenditure was assessed at £278,927 and the expenses of the share issue at £63,000, giving a total of £2,826,570.
From a careful examination of these figures it appeared that the proper price for the ordinary shares was the amount I have previously mentioned, which was made and accepted subject to Parliamentary approval. The figure of £2,659,086 is, therefore, made up of £2,484,643 representing the value of the net tangible assets as at 31st March, 1938, together with a little over £174,000 in respect of development expenditure and of assets written down to a nominal value, and generally the value of the organisations built up by the company in this country and overseas. At the figure proposed the Government are securing the written down assets for virtually nothing. These assets representing aircraft, engines, wireless equipment, premises and plant, originally cost £514,000; they are still in use and have substantial value. There are two points which have been suggested to me by way of questions in the House in regard to this transaction. It has been suggested, and I have seen it in one or two newspapers, that the Government are paying too much, the argument being that the assets have been created by the Government itself in making subsidies to the operating companies which alone made their continued operation possible. I respectfully suggest that that argument is fallacious because in each case the subsidies, like the payments made to the same company from the Post Office Vote for the carriage of mail, were payments


made in fact in respect of services rendered.
It will be observed, especially by hon. Members who have special experience of this matter, that the Government subsidies are not being paid on a deficiency basis, and have in no sense guaranteed the profit or the capital of the existing companies. The development has, in fact, been undertaken by the shareholders in the two companies at their own commercial risk. The subsidies were given for services performed, they were not loans or temporary grants, and, therefore, I suggest that that particular argument, if it is carefully examined, is really not a fair one as far as this particular proposition is concerned.

Mr. Ridley: This is rather an important matter on which we should have the maximum amount of accuracy and clarity. I should have thought that a subsidy ceases to be a subsidy ifit is a payment made for services rendered, and perhaps the right hon. Gentleman will be able to divide the total amount paid and tell us how much has gone towards the carriage of mails and how much does not represent payment for services rendered?

Sir K. Wood: I am afraid the hon. Member has not followed the argument I am making. I am endeavouring to combat the suggestion that the Government have paid too much for this undertaking, the argument being that the assets of the company have been created by the Government, because payments have been made to the company for what, I submit, are services rendered. You have only to take the matter one step further. Does anybody suggest that if, in fact, these companies were transferred or sold to some concern other than the Government any distinction should be made on that account? The answer, I think, is certainly not. In fact in each case the two companies concerned, if they were not merged into a corporation, could have looked forward to a long period of operation during which they might have reaped the rewards of their early experience and expenditure. The only other criticism on this transaction is that it has been suggested that the price should have been assessed at the market quotation of the shares. As hon. Members probably know, the market price for these shares has in recent years fluctuatedwidely, for in-

stance, from 62s. 6d. to 24s., and I suggest that you cannot fairly measure the value of a whole organisation by the price which happens to be quoted for a particular block of shares offered on the market and purchased at one particular time. It would have been an impossible transaction for the Government to carry out the purchase on those lines.
As far as British Airways are concerned, similar negotiations and examinations took place in connection with that company. The Government offered, and the shareholders accepted, subject to Parliamentary approval, to take over the assets and liabilities of the company as at 30th September on payment of £262,500 together with a repayment of advances which had been made by the principal shareholders amounting to £311,000. The shares which the company hold in two internal air line companies are not comprised in the sale. It is estimated that the holders of British Airways shares will receive a total amount of approximately 15s. 9d. for each £1 share. Again, the same process of examination took place, and the value of the tangible assets at 30th September, 1938, as ascertained by the professional accountants, was found to be roughly equivalent to the advances amounting to £311,000 which had been made by the principal shareholders. The further sum of £262,500 represents the amount which was attributed to the value of the organisation built up by the company and the experience it had gained, account also being taken, and properly taken, of the fact that the company had reached a stage in its growth when it could reasonably expect to obtain some return for its past expenditure on development. Regard must also be paid to the fact that, but for the projected merger, arrangements would have been made early last summer for a contract for a considerable period with the Air Ministry for the operation of European services. Again, it can be said, from the point of view of the company, that the date selected for its purchase was perhaps the worst that could have been chosen, as after serious initial difficulties the company might well have hoped for a long-term contract to work itself into a successful position. Let me now turn to the powers of the corporation, which are of some importance to the House and to civil aviation overseas.

Mr. John Wilmot: Can the right hon. Gentleman tell us the difference between the price at which the shares have been acquired and the market price on the effective date?

Sir K. Wood: I do not think there is any quotation for these shares on the market.

Mr. Wilmot: I am speaking of both companies.

Sir K. Wood: So far as the latter is concerned, there is no quotation for them.

Mr. Bracken: This is a very important point. This is a private company and the House of Commons has had no opportunity of considering this matter. I think the House should be supplied with a proper profit and loss account in regard to this company before public money is expended on the purchase of these shares.

Sir K. Wood: I am informed that its accounts are published and are available in the ordinary way. As far as the powers of the corporation are concerned, they are set out in Clauses 2 and 3 of the Bill. Those which require for their exercise the prior approval or general authority of the Secretary of State are contained in Clause 4. They arise where the taxpayers' money is involved, and concern major capital matters and major questions of policy. In many of the matters concerned, approval can be given by means of a general authority so as not to require the corporation to come to the Minister for specific approval in each case, and in many cases it will be possible to frame directions broadly, having regard to the needs of particular services. Many of these provisions exist in similar form in the Empire Agreement, and have not been found to create difficulties or delays, but they are considered reasonable requirements in respect of a corporation in receipt of assistance from public funds.
There is, then, the important question of management. The affairs of the corporation will be administered by a board, the members of which will be appointed by the Secretary of State and will consist of a chairman, a deputy-chairman and a varying number of other members, not being less than nine and not exceeding 15. The corporation will select their own chief executive and fix his remuneration, as well, of course, as their other officers

and servants, upon whom will fall the main duty of administering the day-today affairs of the corporation. It is true —and I gather this is the meaning of the Amendment on the Paper in the name of hon. Members opposite —that the Bill does not provide for complete State ownership and State control, if that means making the corporation part of a Government Department. We believe that the system of management we are providing by these proposals is the better.
The remuneration of the members will be determined by the Secretary of State, with the approval of the Treasury. I would draw attention to the fact that the maximum number of members of the corporation has been fixed at 17. We had in mind in this connection the important matter of Dominion, Indian or Colonial representation, and we have provided for the above number in order to leave room for such representation if it should be proved to be practicable later on. Provision is also made in Clause 2 (3) for the corporation to appoint local boards or committees with such executive or other functions as may be appropriate. This would be another way of enabling the corporation on a wide foundation to develop the trunk routes of the Empire as a whole with the active collaboration of the Overseas Governments. In this connection, of course, there is the question of the financial participation of the countries concerned, and the development of this particular policy, if it is generally acceptable, will necessarily take time, but the Bill does provide for this if such an arrangement should prove to be possible. So far as the tenure of office of the members is concerned, it is contemplated that the Secretary of State should fix the period in the instrument of their appointment. In many important commercial undertakings ithas been found that automatic changes of members by rota is not desirable. There is a further point I must mention to the House. Following many precedents, like the London Passenger Transport Act, the Electricity Supply Act and the Fish Industry Act of last Session, it is proposed that no member of the corporation shall be capable of being elected to or of sitting in the House of Commons. It is the intention of the Government to give the members of the corporation full independence and freedom


of action in all the day-to-day affairs of the corporation; but obviously responsibilities involving the considerable expenditure of public money must remain with the Secretary of State.
As far as Parliament is concerned, the corporation will submit an annual report on its operations, which will be presented to Parliament each year, and audited accounts will also be presented to Parliament each year. I think it can be fairly stated, without I hope going beyond my province, that there will be full opportunity for Parliamentary criticism and control on all major matters. The Secretary of State will, of course, be responsible to Parliament for the proper execution of the duties entrusted to him in the Bill. He will be able to be questioned on all such matters and the whole affairs of policy and progress of the corporation will, of course, be able to be reviewed on the appropriate Air Ministry Estimates. Hon. Members will be glad to know that due care has been taken with regard to the interests of the staff of the two existing companies. I understand that all of them will be transferred to the new corporation. It is also provided that the staff can retain membership of any existing superannuation fund. New entrants as well as existing employés will be able to form a new fund when the corporation commences operations. There is the usual requirement as to fair wages.
There is another important matter to which I would like to refer. I suggest that one of the most important matters that arises, with added weight with the formation of the new corporation, is the adequate and speedy development of aircraft. Not only is the existing fleet inadequate in capacity for the efficient conduct of existing services. Many of the aircraft are obsolescent and there is an immediate necessity, which is considerable, for replacements, apart altogether from the need of further aircraft. It is important from a national point of view that British civil air liners shall not only fully meet the future needs of the corporation, but that they shall also find a ready market throughout the Empire and in foreign countries. In fact, the Cad-man Committee has pointed out the danger of an operating policy which might disregard aircraft development and production and how this would adversely

affect British design. They also stated that foreign manufacturers, particularly in America, not only dominated the European market, but had gained a footing in the Dominions. Accordingly, early this year I appointed a small committee under the chairmanship of Mr. Harold Brown to advise me as to why the methods used in the past for encouraging the development of new type aircraft had not been more successful and what methods should be used in the future.
I think it may be briefly said that in the past three methods of development of new type civil aircraft have been tried; leaving initiative to the industry, leaving initiative to the operating company, and leaving initiative to the Air Ministry. None of these three methods has succeeded. The important report which the committee submitted was recently presented to Parliament. I have accepted their main recommendations, and there will be shortly set up a permanent committee, of high status I hope, to be known as the Civil Aviation Development Committee. The main functions of this committee will be to co-ordinate the needs of air-line operators for new type aeroplanes so that construction may be concentrated upon a relatively few types for which there would be a good prospect of finding a sufficient market to justify production on an adequate scale. There is no doubt that the correlated needs of all United Kingdom operating companies, including the new corporation, as well as of air-line operators of the Empire overseas, whose co-operation would be sought, should be related to the demands of the world markets. And it will be the duty of the committee to advise the Secretary of State what types of civil aircraft are needed and how best the construction of those types can be facilitated and fostered.
The committee will be independent of the Air Ministry and will work through the staff of the recently formed Directorate of Civil Research and Production. It will have an independent salaried chairman and three other members representing the new corporation, the Air Registration Board and the Society of British Aircraft Constructors, and it is contemplated that other air-line operators shall be co-opted by the committee from time to time for the consideration of matters in which they are specially interested. I visualise that the fundamental aim of the committee will be to assist the British air


transport industry to obtain British civil aeroplanes of outstanding merit at competitive prices, so as to meet the needs of British operators and compete successfully in the markets of the world, and also to ensure that such State aid as may be necessary in the development and production of these aeroplanes is applied to' the best advantage. A great deal will depend upon the co-operation of air-line operators, and they will be invited and expected to take their problems to the committee; and I contemplate that endorsement by the committee will normally be essential for any project for which assistance from public funds is sought.
The Government also accept the recommendation that civil type aeroplanes produced by British constructors should, wherever practicable, be used in the Royal Air Force for transport and allied purposes. In pursuance of this policy, an order has recently been placed for a certain number of the De Havilland "Flamingo"aeroplanes. It is also recommended that the Air Ministry should not in general lay down the detailed specification of a new type civil aeroplane and initiate construction by placing a direct Air Ministry order for it. The Government accept this recommendation, subject to the consideration of special cases as and when they arise. There is also the recommendation that assistance should be given from public funds towards civil research and development work and towards the development expenses of new type aircraft. This work is most important and the Government recognise the need for assisting in the finance of the research development work. I do not think it would be reasonable, however, to accept the implication that the cost of civil research and development work, and the development expenses of new type aircraft, should be defrayed principally and for all time from public funds. In so far as the results of this research and development work will benefit the United Kingdom manufacturing and operating industries, the primary obligation to carry on and finance this work rests on those industries themselves. The civil air transport industry already reaps considerable advantage from the aeronautical research and development work done by the State for the Royal Air Force, as many of the problems investigated are common to civil and military aviation, while I would suggest that the present

prosperity of the aircraft manufacturers should enable them to set aside substantial reserves for future development. Therefore, the Government propose to make it a condition of grants from public funds for civil research and development work initiated on the advice of the new committee and for the development expenses of new type civil aircraft, that the aircraft manufacturing industry shall in general contribute, according to the circumstances of each project, a due share of the funds required.
I am indebted to the House for listening to me so long and with such patience this afternoon. In conclusion, I think it must be a matter of gratification to the House that we have been able to-day to consider what I would suggest are important and far-reaching proposals relating to civil aviation. This was surely the real and beneficent object which science and invention intended for mankind in the air, and aviation was meant to link the nations in the bonds of friendship and good will. The introduction of the Bill, at any rate, demonstrates that, despite our urgent military preoccupations, we are not neglecting the importance of British civil aviation. With our scattered Empire this is of particular moment to us, and flying must play an increasingly important part in binding the Empire still closer together. We are not, perhaps, too optimistic when we look forward to the time when the production of our military aircraft will be less urgent and when there will be an increased demand for civil aircraft throughout the world. Are we not rightly looking ahead to the time when our country should take, in this also, a leading part and be able to transfer some of its present great efforts and organisation to the civil field? These proposals, it is true, mean a new pattern into which important parts of our civil aviation organisation are to be set, but we have to plan ahead and adapt our methods and machinery to the age and conditions under which we must pursue our endeavours, and I suggest to the House that this new corporation will enable us to overcome many of the difficulties which have hitherto delayed the advance of British civil aviation, that it will enable adequate finance to be employed on reasonable terms and long-range plans to be projected, and also that it will assist us to obtain aircraft in keeping with the high engineering achievements of this country.

Mr. Montague: May I ask a question in reference to an important omission from the right hon. Gentleman's speech, especially in view of recent events? Will he state what is to be the policy of the corporation in respect to trade union rights, not only regarding pilots but also the ground staffs?

Sir K. Wood: I will ask my hon. and gallant Friend to deal with that when he comes to reply.
5.3 p.m.

Mr. Lees-Smith: I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof:
this House cannot assent to the Second Reading of a Bill which fails to establish a national unified air transport system to be operated solely in the public interest, and regrets that in the financial arrangements for the acquisition of certain undertakings His Majesty's Government have permitted speculative private profits resulting in an excessive capital burden.
I listened to the early part of the right hon. Gentleman's speech with a good deal of enjoyment and pleasure and sympathy. This is a Bill for the purpose of transferring the marvellous expanding industry of civil aviation from private enterprise to public ownership, and, so far as its general purpose is concerned, my hon. Friends and I will give it our support. The Bill is an example of a strange spectacle which the House and the Government have presented for the last four years. When the subject is discussed in the abstract on Wednesday afternoons and in evenings on Private Members' Motions, the Government always stand forward as the champions of private enterprise and competition. Having done that, they spend the rest of the Session in passing Bill after Bill to help industry after industry to get rid of private enterprise and competition which is bringing them to disaster. In previous Sessions we have had the fishing trade, the shipping trade, the coal trade, iron and steel; last week it was the cotton industry, and now the right hon. Gentleman proposes to adapt the same principle to civil aviation. Indeed, when he began giving his reasons for the advantage of public ownership he really became quite lyrical. I thought he was going to burst into poetry. When I heard him speaking of the great advantages of centralised control and concentrated management,

forward planning and care for the national interests as distinct from private interests, he reminded me of the very first speeches on these subjects that I heard 35 years ago in Hyde Park by the late Mr. Keir Hardie. But, when I come to look at the details of the Bill, the right hon. Gentleman is a very refractory and unwilling pupil, and he will have to do a good deal better than this before he can expect us to address him as "Comrade Wood."
We have certain objections to the structure of the Bill, but our major objections are to its financial foundations. He said something about the possible structure on which a Bill might be founded, and, indeed, there are two methods by which you can place an industry under public ownership. You can adopt the method that is adopted in the Post Office—have all the funds provided by the Government, have it responsible to this House and open to detailed questions in the House. That is a good system. I think it is one of the reasons why the Post Office is regarded by the country generally with pride and esteem, because it has a responsibility to this House and questions in the House, and more particularly the liability to questions in the House, keep the undertaking continually on the alert. But there is an alternative method, with which we are perfectly willing to see experiments made, and that is the method of a public corporation, of which a fairly good example is the London Passenger Transport Board. My impression is that, if you have a public corporation, it will not be found in practice to be so subject to detailed questions in the House as, say, the Post Office is. The London Passenger Transport Board and the B.B.C. are not directly responsible to the House, but they have the advantage of independent commercial management.
Taking the name of the new institution, the British Overseas Airways Corporation, I thought at first that it was going to be on the model of the London Passenger Transport Board and, if it had been simply that, I should have accepted it, but, in fact, it is not. When you look at the Bill in detail you find that this corporation is not to have rights of independent, commercial management. It is not to be comparable to the Passenger Transport Board. The capital is practically provided by the Government—it is


guaranteed by the Government. The Board itself is directly appointed by the Government. The number of its members is determined by the Government, and I presume that they are subject to reappointment and dismissal by the Government. It cannot provide working capital, it cannot manufacture equipment and it cannot extend its services without the consent of the Secretary of State. In fact, this new corporation is in practice a Department of the Air Ministry, but it will not be subject to the same close control by this House as if it were a Department in name as well as in reality. I believe it will be found to have the disadvantages of both systems without the advantages of either.
I will give one example of a Clause which has been introduced into the Bill which could not have been introduced if it had been a direct Air Ministry service or under independent commercial management. In past years there have been a great many criticisms of Imperial Airways on account of the speed of the machines and their up-to-date character, and Imperial Airways has always replied that its machines are not its own responsibility. They are manufactured by an industry in which it has no share. Under those conditions may it not be very wise and advisable in future years for this corporation to have power to manufacture its own machines? It has power to manufacture equipment—to manufacture parts. Might it not be advisable that it should be able to assemble the parts into the complete machine? The Bill lays it down that the corporation shall not manufacture aircraft. Why not? The War Office has its own ordnance factories. The Admiralty has its own shipyards. If this were a department direct of the Air Ministry, you could not impose that limitation on the Air Ministry. The Post Office manufactures a large part of its own plant. If it were a perfectly independent corporation, like the railways, it could manufacture its own implements, as they manufacture their engines and rolling-stock. It is half-way between the two, and this is an example where it has neither the advantages of public ownership nor of independent management.

Mr. Simmonds: Has the right hon. Gentleman noted that, owing to the peculiar circumstances and technical development of aircraft, not even the Air Ministry takes to itself the privilege of

manufacturing aircraft? Therefore he cannot say that, if the Air Ministry were to run civil aviation, it would in fact manufacture aircraft, which the corporation cannot do.

Mr. Lees-Smith: Perhaps it does not, but it is a point frequently discussed in the House whether it should, and undoubtedly if there were a change of Government it very likely would. Here is a Statute which says that the corporation shall not manufacture aircraft. If a Bill were introduced laying it down that the Air Ministry or the War Office or the Admiralty should not manufacture for itself any implement required for its own service, that Clause would not have a ghost of a chance of passing through the House.

Lieut.-Colonel Moore- Brabazon: The London Passenger Transport Board was prohibited from manufacturing, and the London Transport Bill was promoted by the Labour party.

Mr. Lees-Smith: It was introduced by the Labour party, but they did not carry it through. It emerged in its final form as the product of the present National Government.
I come now to the financial provisions. Let us begin with the broad facts of the situation. These are the facts on which the second part of our Amendment is based. I lay it down as a proposition that when the State acquires an undertaking, it ought not to pay more for that undertaking than private individuals or any commercial company would pay. It is intolerable that because the State is going to acquire an undertaking, the value of the shares should rise and that more should have to be paid by the State just because the Government is the purchaser. Let us look at what actually happened. I am dealing only with the finances of Imperial Airways. I cannot take an example from British Airways because it is a private company and its finances are not open to public examination. But taking Imperial Airways, we find that on the morning of nth November, 1938, the shares stood at 25s. 3d. There are about 1,623,000 shares, and that was the market valuation of the whole undertaking on that morning—a little over £2,000,000.
That, as I say, was the valuation of the company according to the market, before


the Government made any announcement that any merger was to be formed. That afternoon in this House the announcement was made that this new merger would be formed and as a result the shares rose from 25s. 3d. to 29s.or 30s. That meant that the public were taking it for granted that the Government were going to be squeezed. The shares rose because that was the market estimate of the increase of price which the Government would pay when the financial arrangements of the corporation were complete. The statement was made that the corporation would be formed. It was then said that the actual price to be paid for the shares would be stated later, but it is clear from this figure of between 29s. and 30s., that that increase represented what the market expected the Government to pay. I say that never was there the widest surmise that the Government would suddenly decide to pay 32s. 9d. I say that no shareholder, no dealer, no stockbroker and no member of the public ever had the slightest expectation that this gift, as from on high, would be distributed to the shareholders.
I think I can show that these were rather peculiar events which took place on the Stock Exchange that morning when the final announcement was made, and I should like some explanation from the Government of those events before this Debate comes to an end. The announcement was made on 12th May, in the afternoon, in this House. At that time the shares stood at between 29s. and 30s. On the morning of 12th May, however, before any announcement had been made in this House, before any dealer on the Stock Exchange, or any member of the public knew of it, the shareholders of Imperial Airways had received a letter from the board, written on the day before—11th May —telling them that the Government would pay 32s. 9d. They were the only people who knew. They are not simple people, and naturally a considerable number of them immediately telephoned to their stockbrokers to buy up these shares at 30s. They did so throughout that morning and large sums of money passed because these people alone knew what the Government were going to pay.

Sir Patrick Hannon: What is the right hon. Gentleman's justification for the statement which has has just made? It

is a very serious statement to make, that those responsible for the reconstruction of the finances of this undertaking gave some information which led to an excessive price being paid. The right hon. Gentleman should not make a statement of that kind to the House of Commons unless he is prepared to support it by evidence.

Mr. Lees-Smith: What I have said—and I hope the hon. Gentleman will follow me in this—is that the Minister made the announcement on the afternoon of 12th May and that the shareholders received the letter to which I have referred on the morning of 12th May. The letter was written on nth May. The hon. Gentleman asked me for proof. My proof is that I have the letter here and that it is dated from:
Imperial Airways, Limited, Airways Terminus, Victoria, S.W.11. 11th May, 1939.
It begins:
Dear Sir. I am directed by the board, etc.
This is the relevant passage:
The terms of the offer subject to the approval of Parliament are that the corporation, as consideration for taking over the assets and assuming the liabilities and obligations of Imperial Airways, including transactions of the company since 1st April, 1938, shall pay the company such sum of money as will permit the payment to the shareholders of 32s. 9d. for each issued and fully-paid ordinary share of £1.
That is my proof and I hope the hon. Gentleman is satisfied. I gather that he is. As he says, it is a very serious matter. Let the Government treat it as a serious matter. They have made no protest hitherto and have given no explanation to the House of what happened on the Stock Exchange when these dealings took place and this extra 2s. 9d. or 3s.was made by a number of people. When the jobbers who sold the shares found out later, that the shares had been bought at 30s.by those who knew that the price was going to be raised, they did not like the transaction. I am not familiar with the Stock Exchange but I have made very careful inquiries into this matter. I am told that it is very seldom that a jobber will go to a dealer and ask him to undo a bargain, but jobbers did so on this occasion. They thought it was unfair and numbers of them went to the stockbrokers and asked them to undo these transactions on the same day. Those who


had already informed clients of the prices at which they had bought, could not do so, and this speculation in shares, to which we refer in the Amendment, actually took place.
This wants explanation. This, as I have said, is Imperial Airways. We have had to complain of it before, and we complain of it again. I understand that some explanation has been made to the Committee of the Stock Exchange but the shareholders will get the extra 2s. 9d., not only on their own original shares but on the shares which they bought as the result of their private information. I say that this is a subject which does not fall to be dealt with by the Stock Exchange alone. This is a rather unsavoury and reprehensible event, which concerns the Government itself, or which concerns a transaction with which the Government is indirectly connected. I think Imperial Airways should have made an explanation, not only to the Stock Exchange but to the Government and I hope that before to-day is out an explanation will be made to this House. All this shows how unexpected it was to industrialists and to the Stock Exchange that the Government were going to distribute this largesse to the shareholders of this company. What is the result? The final result is, as I say, that the shareholders were paid 32s. 9d. and that these 1,800,000 odd shares have cost £2,600,000 or a little more, which is £600,000 more than they could have been bought for before the public announcement of this merger was made in this House.

Mr. Assheton: Does the right hon. Gentleman suggest that it would have been possible to buy the number of shares required, on the market, on that date?

Mr. Lees-Smith: I do not, and I am coming presently to the right hon. Gentleman's defence of this valuation. But I have laid it down as a proposition that when the Government buy shares, one of the factors which ought to be taken into account in determining the valuation, is that the price should not be more than would be paid by a private individual or by another company which was absorbing the company in question.

Mr. Assheton: I agree.

Mr. Lees-Smith: I have given that account of what took place and I suggest

that it shows how fortunate it is to be supported by the financial Press because this has not been commented upon by the financial Press. I do not think the transactions to which I have referred have been even mentioned in the financial Press, whereas I believe that if this enormous sum of public money had been handed over, and if this transaction had taken place under a Labour administration, those very financial papers would have tried to hound them out of office as wasteful spendthrifts unworthy to govern the country. The right hon. Gentleman has given us his explanation, a fairly careful explanation of how this particular sum was reached—this sum which, I say, was £600,000 more than the market valuation of these shares before the formation of the merger was announced in this House, What is his explanation? He says that there was an examination made by accountants of the various balance sheets of this company; that various assets were taken into account; that this was the figure finally reached, and that the market price of the shares is quite irrelevant to the final figure.
The right hon. Gentleman speaks as if a valuation by accountants were some process which gave you exact results and results which you could not question. But, as a matter of fact this kind of valuation by accountants only gives you a vague rough-and-ready figure which you are not entitled to take, without also taking into account other considerations such as the value of the shares. They try to value tangible assets such as stock in trade and there are also intangible assets such as goodwill. A number of items were set down in the balance sheet as worth nothing, on which, as the right hon. Gentleman said, a value was finally placed of £170,000. You cannot depend solely upon that kind of valuation by accountants. Differences of opinion between different accountants would easily give you variations of 20 per cent. to 25 per cent. in the valuations put upon the shares of an enormous company like this. For that reason I claim that, while the value of the shares in the market at the time may not be a complete indication, it ought to give a ceiling figure beyond which the Government should not be expected to go, and, once again, I lay down the proposition that there is no reason why the Government, in any circumstances, should pay more for these shares


than an individual would need to pay for them if he bought them, in the ordinary way, through the Stock Exchange on that morning.
I was interested to follow the detailed account which the Secretary of State gave of the manner in which the negotiations were conducted for the Government because my opinion is that if negotiations are conducted in that way, the Government will always have a bad bargain made for them. The negotiations were conducted, the right hon. Gentleman says, largely through an independent firm of accountants, Messrs. Thomson, McLintock & Co., who acted more or less in an arbitral capacity in this transaction. On the other hand Imperial Airways were represented by their own accountants I remember a phrase in the Cadman Committee report in which they pointed out that Imperial Airways was a corporation which had always proved itself to be very unyielding in negotiations. So you had the unyielding accountants of Imperial Airways on the one side and Messrs. Thomson, McLintock, & Co., representing the Government, on the other side. In my view the Government ought to be represented in this kind of bargaining by an authority representing the Government themselves primarily, and not by independent accountants from outside. The proper people to conduct bargaining of this sort are the Treasury, and if the Treasury would deal with these companies with the same keenness as they deal with their brother Departments, they would not make a bargain like this.

Sir P. Hannon: Is not the right hon. Gentleman aware that these outside auditors stand in the first place in their profession?

Mr. Lees-Smith: I do not make any criticism of their system of accountancy, but I say that Imperial Airways in these negotiations were represented by their own officers and the Government ought to be represented by their own officers and not by any outside body. Take the case of the Post Office. This kind of transaction is nothing to the Post Office. It has engaged in negotiations with the cable makers ring, for telephone lines for overhead cables and for the apparatus needed for carrier waves, involving at least £20,000,000, compared

with which this £3,000,000 is quite insignificant. Does the right hon. Gentleman think the Post Office would leave that sort of thing to outside accountants? They would never dream of doing so. The Post Office has its own Accountant-General and staff, and its own stores department, and I remember that the late Lord Inchcape, the first Lord Inch-cape, who spent many years in negotiating contracts with the Post Office on behalf of the P. & O. Line, telling me, when I was at the Post Office, that he had always flattered himself that nobody had ever got the better of him excepting the Post Office, which, he said, was the fiercest bargainer in the land. If the right hon. Member had not given this work to Messrs. Thomson, McLintock and Company, but had called in the Accountant-General's Department of the Post Office, he would have saved the nation hundreds of thousands of pounds. This is an example of what has happened before. We are buying this company at an inflated price, but it is the old story, on a smaller scale, of the National Telephone Company, it is the story of the London Passenger Transport Board, and it is what we always see in such cases. Public ownership is advocated and set on foot for the reason, which the right hon. Gentleman has explained, that it will give great economies in administration, but it is never tested out on fair conditions, because although it does give those economies, the economies are skimmed off by the Government in advance by taking the opportunity of handing over national assets to the shareholders of a private concern.
5.35 p.m.

Sir Hugh Seely: I shall not vote for this Bill, though not for the-same reason as that suggested by the right hon. Member for Keighley (Mr. Lees-Smith), who has just sat down. I was staggered at this idea, which is now put forward on behalf of the Government, that everything is right when you get nationalisation. Personally, I do not believe in it, and I am not one who wishes to extend it. The right hon. Member for Keighley made the most damning case against the Bill, but when he came to tell the House why he did not want to vote for it, I did not think he was very clear as to how he would have carried through this operation, and how wonderful it would be for


the airways of this country if they were run on a national basis. He referred to the Post Office and the late Lord Inch-cape, who, he said, had found the Post Office the worst people to deal with. All that I would like to say with regard to that is that the late Lord Inch-cape did not die in great poverty and that the passengers on the steamship company which he ran were never very comfortable.
There are three questions in connection with this Bill: (1) Why has it been brought in? (2) The methods which have been employed to bring it in; and (3) What good will it do towards building up what everybody wants, namely, our Imperial air routes and the civil air routes in this country? The Bill has been brought in largely because of the Fisher Report, the Hambling Report, and the Cadman Report. It is curious, when you read those reports, to find the very strong criticism running through all of them against Imperial Airways, which are now to be made the big company, and against this system of subsidies to make it a success from an efficiency point of view. Whatever other people may think, certainly my hon. Friends and I and many people in this country do not believe that you will get real efficiency if it is based on a subsidised line. The Hambling Report refers to difficulties in such cases and tells of people who receive subsidies being very apt merely to continue just to make those subsidies, and all initiative dies. I agree with the right hon. Member for Keighley to a large extent that if you try to run both systems, you will not get benefit from either of them. You must either have the one, with initiative and drive, or the other, which will be pure State control.
These three reports have resulted in this Bill, and I do not think that anyone can really think that the way in which the Bill has been brought in is very good, with this valuation framed merely on the case of Imperial Airways and done by Messrs. Thomson, McLintock & Company, and the results which came from the enormous increase in what the public thought the value of this company was. I agree that you cannot say that what the shares are stated at on the Stock Exchange is necessarily the value of the company. That can quite obviously change to a large degree. In the case of the other company, although it is a private company,

anyone who has seen the balance-sheet knows that it is not a question of shares. Anyone who knows that balance-sheet must know that that company was absolutely "broke." It had no money at all, and it was practically in liquidation. I am prepared to listen to anyone who likes to say that that is not so, but it is a fact that this company was "broke." It has now been taken over by the Government at the enormous figure of, I think, 15s. 9d. per share, and it must cause a great feeling of unrest that, when the Government wish to buy two companies to form a corporation, the financial arrangements are made in this way.
We in this House have a right to ask for more information than we have had on those points which were made by the right hon. Member for Keighley, as to what was the true state of the other company, because we have paid an immense sum of money, and it is those questions which cause such unrest. The three Commissions that we have had all showed us that we have to face the fact that civil flying, unless aided by the State, has great difficulties to contend with, particularly in Europe. I am not saying that you do not have to have some State assistance. They have been able in America, with longer routes, and with one country, practically, operating, to avoid what you get with another country competing, and it is no good trying to contend that there have not been direct subsidies from those other countries which we have had to face. I do not think, remembering the Debates in this House, that anyone can say that it was purely a question of money that put Imperial Airways where it was. We remember the Debate on pilots. Everyone who has flown by Imperial Airways knows the time, which has not gone yet, when there was a great deal of real inefficiency, with old-fashioned machines, which are still operating on lines such as that from Paris to London.
There was an answer given the other day by the hon. and gallant Gentleman the Under-Secretary of State that you had to have on the Paris-London line the old Hannibal machine, on which, hon. Members may remember, a dinner party was given some years ago to celebrate, I think it was, the 1,000,000 miles that it had flown. This was considered a great record in the history of the company, but to my mind it was a great disgrace, because


it showed only too clearly that there had not been new machines coming forward; and it was nothing to boast about. We all thought that that sort of thing had changed, but these machines are still in operation. You have only to go on that line and you will see them now. We feel that merely to take over this corporation with the same people, as we now hear, operating it that operated it before, will be of no advantage. This corporation is really to have no interference, and it makes one wonder whether Imperial Airways is in the right hands at the present time. I know there have been changes on the board, and one hoped that they would been been very sweeping and that the whole policy would be altered, but anyone who has travelled in those machines —and I have, a great deal, one way and another —knows that it has not really changed, and that you have not got the real service which will attract money and make a success.
I cannot believe that the right hon. Gentleman believes in this system of State control, although he tried to cajole the House by saying that he had got Clause 16, and by saying what a great advantage it was that when, through their efficiency, after a certain time, if they made a sum of over one-tenth, one-half of the balance would be paid to the Exchequer. Actually that is a 50 per cent. tax on any efficiency which this company may be able to achieve. I cannot see that there is anything in that Clause about which the right hon. Gentleman, standing, as I presume he is, for private enterprise, should feel reason to boast. There are three points to be considered: Why the Bill has come, which is that there hasbeen a series of muddles and of inefficiency; the way it has been done, which is hardly a credit to the Government; and what it is going to do, of which we only heard something in the last words of the Minister. Personally, I hope that it will do a great deal; everyone hopes that; but I cannot believe that this is the right way to tackle the problem, and I cannot vote for the Bill.
5.45 p.m.

Lieut.-Colonel Moore-Brabazon: We have had two speeches from the Opposition in answer to the very clear exposition of this Bill by the Secretary of State. I was a little surprised that the Leader of

the Labour party was unable to give the Bill that party's blessing. Speaking only the other day the leader of the London County Council, the right hon. Member for South Hackney (Mr. H. Morrison) said in the course of some remarks dealing with the personnel of the London Transport Board:
There are problems of management as well which are worth consideration. This is important when you have this development of public corporations. The Government are bringing forward yet another, and if you get a Labour Government there will be a whole series of them in the process of socialisation, which will come with great speed.
The Labour party are in favour of this type of development, and I think that to withhold their votes because of one special detail of valuation is not to deal with the Second Reading of the Bill as it should be dealt with. That is a question for Committee and nothing else. I should like to say one word in regard to what the spokesman of the Labour party said with regard to manufacture. If we were now in the position of giving powers to the railway companies I do not believe there is anybody who would ever again give them powers to manufacture. Some of the most outstanding things that have happened in connection with the manufacture of engines and rolling-stock would never have occurred if railways had not had the right to manufacture. The Transport Board have not been allowed to manufacture. On that point I should like to remind my hon. Friend that in a few years time, when we come to some normal state of affairs, there will be plenty of national aircraft factories up and down the country, and if they like to tender for civil aircraft —well, whoever quotes the lowest price will win. I noticed that my hon. Friend the Member for Berwick (Sir H. Seely) does not like this socialisation of aircraft, and I agree with him on the broad principle, but I think it is difficult for him to put forward an alternative which would really convince the House.
There are one or two things which I should like to say about this Bill. My first point is the dreadful name which has been given to it. I know that a rose will smell as sweet by any other name, but the Government need not have saddled the corporation with the name of a serpent. B.O.A. is really too much —a boa constrictor corporation. Really,


initials do mean a lot in these days. My right hon. Friend set up an important committee which is now known as the C.A.D. Committee. Initials do count for something. A little thought and consideration might be given to the question of the title. I shall move in Committee that the corporation be called the Air Imperial Routes Corporation. It will then have the initials A.I.R., which I think sound very well. There is a precedent for changing the name of a company, even the name of a Ministry. I was in the House when the Ministry of Transport was introduced by Sir Eric Geddes, and I think it was introduced as the Ministry of Ways and Communications, but that name was changed in Committee to the Ministry of Transport.
My hon. Friend the Member for Berwick spoke as though one could run this business as an ordinary commercial undertaking. I must remind him that the aeroplane is a very inefficient commercial proposition. It has grown up, much to the disappointment of my hopes, under the stress of a hothouse growth during the War, with the result that it has never really developed upon normal lines at all. The great concentration of the nation was put into aeroplanes at the time of the War, with the result that engines were manufactured quite irrespective of cost. Machines were manufactured irrespective of their having to earn money. The running expenses of aeroplanes are far more than they would have been had they been developed along the ordinary lines. Mr. Holt Thomas, with great vision and great daring, and with all his money, tried to run civil aviation with war machines, with the result, of course, that he failed. But he did have a hope in his heart that one day there would be a divorce between the civil side and the military side of aviation, and we must remind ourselves that nowhere since the War has there been such a divorce. The best example we can show is what happened in America, where there was fierce competition of a private type —admittedly with subsidies —which did produce the modem Douglas machine. That was an enormous advance on anything which had previously been seen, but what was the tragic result? The machine turned out to be the world's best long-range bomber —and back we were again at the old business of developing aircraft entirely for war.
If that competition for technical developments had evolved a machine which could pay its way I should not be supporting this type of Bill at all, but the tragedy is that to-day there is no machine which will pay its way, and we cannot leave the position as we find it, with private companies competing against one another with vast subsidies from the State. That is the tragedy of the whole of this question. If it were only a small subsidy we might go in for the alternative of many different companies, lightly subsidies by the State, which could compete, not along parallel lines but along different lines, whereby we should be able to compare their efficiency and results, but these subsidies are so enormous, the taxpayer is asked to pay so much, that we really cannot face the idea of such companies existing and paying dividends which really, in effect, would be paid by the taxpayers. If the State pays, then the State must control. I think this corporation shows that balance between the hand of the State and the initiative of the private man which has been demonstrated in the institution of some of the great corporations which we see up and down the country to-day. I think it reflects the genius of our race that we have been able to construct that half-way house between complete socialisation, with its rather dead hand, and the initiative of private enterprise. The balance does us great credit.
Transport is a difficult subject when we are speaking about competition. Some people have advocated tremendous competition in transport, even in London. What would have been the result if we had left things to follow their own course? The motor buses of London could have killed the tubes. Would that have been of great advantage to London? Certainly not. Competition in transport means only that one day one particular route will go out of action, and that is not for the benefit of the travelling public. The position is different from that in ordinary trading, and for that reason I would hate to have seen private air companies subsidised by the State running against each other, anyhow on parallel lines.

Mr. Bracken: Some of the largest subsidies are paid to shipping lines. Does the hon. and gallant Member suggest that we should have one shipping corporation?

Lieut.-Colonel Moore-Brabazon: No, I do not, but in the case of shipping there


is no subsidy on the scale which this system of transport envisages. The shipping companies are certainly fighting against each other, but the subsidy has only been given to help them to keep their heads a little more above water.
I do not want to become a sort of civil servant and say, "There are two points here," but I do want to draw attention to the fact that two important things have to be considered, one the running of the operating company and the other the production of the aircraft for that company. They are two separate things. The operating company is not to make aircraft. If the present company had machines which were 'way ahead of the world, and which were thoroughly efficient, they could run their enterprise a great deal better than is the case at present, but one of the troubles of this country is that our machines are frightfully out of date. The Secretary of State had the vision to appoint a Committee for the Production of Civil Aircraft and we must consider this Bill with what is to be found in its recommendations, because the things go absolutely side by side. On page 4 of its report we find that the terms of reference are:
To consider, with the proposed merger of Imperial Airways and British Airways in view "—
showing that they knew it was coming about —
how best to improve the co-ordination between the aircraft constructors, air line operators and the Air Ministry in the production of civil air lines and how development work could best be inititated, controlled and financed.
This is a document which I would ask everyone interested in this problem to read. Let hon. Members notice what is said on page 10:
Unless the Government is prepared for many years to come to furnish considerable sums for civil aircraft development in addition to the subsidies to air-line operators, there is little or no hope of this country winning a leading place in civil aviation.
Again, on page 12, the Committee say:
We would also emphasise once again that no co-ordinating machinery can in itself remedy the backward state ofcivil aviation in this country. This can only be done by giving from public funds generous assistance towards civil research and development work and towards the development expenses of new aircraft. Without this there is in our opinion no prospect of this country taking a leading place in the civil aviation world. Even

with such assistance on a liberal scale it must be several years before appreciable results can be expected.
Those are very serious words. My right hon. Friend said that he was going to implement the recommendations of that committee, but the success of this new enterprise, wrapped up as it must necessarily be with the efficiency of new machines, is rather going to be handed over to the hands of this new committee, and what they will be able to do from the point of view of spending money in development I was not clear about from his remarks. I do not know whether they can embark on great programmes of development and design with State money. Whether that money will be independent of the money given to the new corporation was not quite clear, and I hope the Under-Secretary will be able to tell us more about that later. Consequently, this project is a trinity, though a comprehensible trinity —the corporation, the C.A.D. Committee and the Government, and the machine will work only if the wheels are beautifully oiled by money from the taxpayers. The whole thing really depends upon that. It will be easy to run the corporation; the key of the situation is the new committee, the C.A.D. Committee. If my right hon. Friend will put brains and men of vision there, and give them money, the future of the new corporation is assured; but they cannot make bricks without straw. They cannot be the great overseas development corporation that we hope if they are not able to have very good machines.
To me, this is a day of regret and also a day of great pleasure. I feel relieved that from now on we shall see that thing happening for which I have been hoping all my life, the divergence between military aviation and civil aviation. The Government, the House of Commons and the country have hitherto always looked upon civil aviation in the same way as a cow looks at a passing train —" very wonderful, but nothing to do with us." This matter is certainly of interest to us because it is basic to our Empire continuation. By means of this wonderful invention geography has been completely upset. We are no longer separated by distance but only by time. I hate the word "prestige," but I like to bring it in, for the reason that every English aircraft which travels from one side of the


world to the other is a little bit of England. England will be judged by that little bit by those for whom that is the only thing they know of England. Wherever they go, English aircraft must be the best and the finest in the world. I have hoped, and I still hope, that aviation is at last to be changed from being a threat cursed by the world to something which will be a benefit. I sincerely hope and pray that these machines of ours which will be flying from one country to another will weave like a shuttle going to and fro the fabric of an internationalism which will bring peace and the blessing of understanding, but we have to start in a big way, with imagination and with money.
I believe we are doing it the right way. I believe that we are starting to-day upon a very big project. I wish that my right hon. Friend could always be in office in this Department to see that the thing gets the push and drive that it ought to have. I only hope that his successor will see it in the same light. Here is the dream; here is what we wanted many years ago. This is what all the pioneers hoped for when they gave their lives. I know that this opportunity is surrounded with difficulties. There are nettles, but we must grasp them firmly with both hands.
6.5 p.m.

Mr. Ridley: Not even my most caustic colleague would have dared to liken the Government to a herd of cows, except for the circumstance that, if they were left to each other, although they might have pride of ancestry they could not have any posterity. The hon. and gallant Gentleman who has just spoken has postulated a political opinion of which, I hope, my hon. Friends will take careful note. It is becoming a danger; it is that we may, if welike, nationalise anything which is not profitable, but woe betide us if we attempt to acquire for the State something which would yield a profit if the State were to acquire it. It means that the whole process of nationalisation is to be prostituted by a Government which does not believe in it in order to relieve their friends of the bankruptcy proceedings which they would otherwise have to experience.
I interrupted the right hon. Gentleman while he was making his statement, not because I wanted to engage in interruption but because I wanted to get from him a little clarification. He was attempting

to contradict the view which he knows is held by some hon. Members that subsidy payments to Imperial Airways have made their capital assets, and that the purchase price of 32s. 9d. a share on the capital assets is not only an extravagant price compared with the market value of the shares but is more extravagant when account is taken of the fact that the subsidy payments have helped to build up the market share-value. The right hon. Gentleman referred to the fluctuation in the value of the shares of Imperial Airways, somewhere between 16s. and 30s. but hardly more than 10 years ago —in 1927 —the ordinary shares of Imperial Airways, the 15s. paid up, were standing at 6d. on the Stock Exchange. I ask the Minister how he came to use the strange phrase that subsidies were payments made for services rendered. A subsidy is a payment made in order to bolster up an undertaking that otherwise could not continue. A separate payment is made for services rendered which is not to be confused with a subsidy. The two things are very distinct and can easily be separated.
There is some confusion on this point. Perhaps the Under-Secretary will tell us what payments have been made to Imperial Airways since the formation of the company by way of subsidies, and what additional payments have been made for whatever services Imperial Airways have rendered to the State. If the subsidies were not necessary as subsidies, they were more extravagant than my hon. Friends assumed was the case. If they were necessary, as I assume they were, for the continuance of the undertaking, they must have formed part of their capital assets, in which case the State are now buying back capital assets to which the State has made a very substantial contribution.
I would ask the Under-Secretary three questions. First, whether there have been any talks with the representatives of the staff with regard to trade union membership. I was a little alarmed at the diffidence of the right hon. Gentleman in replying directly, specifically and immediately to a simple question on this point. I should have thought he could have told us that there would be no bar in respect of trade union membership and organisation, but he left it over for about four hours, when the Under-Secretary will have


an opportunity of giving an assurance on that point. Would the Under-Secretary of State make it plain that there will be no obstacle at all in the way of trade union membership or organisation? Will the Under-Secretary say whether there has been any negotiation or conversation with the staff or whether representations have been made as to the superannuation arrangements incorporated in one of the Schedules? I should have thought, speaking with some minor experience in regard to superannuation funds, that it would have been preferable to provide for a new all-inclusive fund for the new corporation, say a new statutory fund, that would have brought into membership all the employés of the two constituent undertakings and all those who have entered into the employment of the new corporation. Perhaps the Under-Secretary will say whether the present staff are satisfied with the arrangements proposed in the Schedule.
I noticed one very strange and unfamiliar omission from the Bill. In his opening statement the right hon. Gentleman referred to the London Passenger Transport Board as an organisation on which, in a general sense, the new undertaking is being modelled. I would draw the attention of the Under-Secretary to the fact that in the Statute which established the London Passenger Transport Board, and in similar Statutes, including the Railways Act, 1921, and in all local government legislation, there is provision for compensating those persons whose services may not be required by the new undertaking or who will be adversely affected by their transfer to the undertaking. I see no such provision in the Bill. The Under-Secretary may say that there will be no need for a provision of that kind, but it is very dangerous to rely on that kind of assumption and to omit from the Bill such a very important provision.
My interest is further increased by what hon. Members will find on page 40 of the Bill in paragraph 4 of the Fifth Schedule which reads:
Any person who is, immediately before the appointed day, in the service of the company and does not enter the service of the corporation, shall —
It does not say for what reason he does not enter the service of the corporation, and it does not say:

who does not enter the service of the corporation of his own volition.
It may, in fact, be the case that the new corporation may determine that it cannot employ a person at the age of 45 or 53 or some other age short of 55 years of age, and it may, in those circumstances, dispense with those services without compensation and with loss of pension and of tenure. That sort of insecurity is implied in this legislation, and I am of opinion that there should be included in the Bill provisions similar to those included in the London Passenger Transport Act.
The Bill is the kind of legislative curiosity to which the Government are now accustoming the House. It contradicts all their public declarations and violates all the cherished convictions of the Tory party. There are, in principle, two outstanding economic phenomena. One is that public ownership is being used more and more to bolster up a weakening capitalism. The other is that public ownership of a bastard kind —I use the expression which the hon. Member for Oxford University (Mr. A. Herbert) used in this House some time ago without arousing the displeasure of the Chair or of the House as a whole —a kind of bastard public ownership is being used in practice by a Government professing not to believe in it in principle; and it is to be assumed that it is not being used in the right way, for no one who does not believe in doing a thing in the right way can manage to do it in the right way. That is the reason why the Bill does not take the form that it should take, and why my right hon. Friend has moved the reasoned Amendment which is now before the House.
Many years ago in this House there was a brilliant but rebellious Member, whose one-time constituency, curiously enough, is at this moment vacant because of the lamented death of one of our colleagues on these benches —the constituency of Colne Valley. I remember being at a meeting addressed by Mr. Victor Grayson when he was asked, "Do you regard the Post Office as Socialism?" He replied, "Well, I once knew an old lady who was very hungry. She prayed very hard for bread, and a loaf came down the chimney, all covered with soot. The Lord sent it, but the Devil brought it." We have a spate of this inconsistent legislation. There died a few days ago a


gentleman who at one time occupied ministerial office and sat on the benches opposite, and who piloted to the Statute Book probably the greatest measure of public control, apart from actual public ownership, that this country has ever seen, namely, the Central Electricity Board. And that gentleman was at the same time the President of the Anti-Socialist Union and quite unconscious of his inconsistency.
We have had Governments professing not to believe in the principle but bringing into practice the sort of public ownership or control that is characterised by the Central Electricity Board, the British Broadcasting Corporation, and the nationalisation of mining royalties, and at the time of my election to this House the greatest disservice was done to my opponent, who proclaimed with fervour that the nationalisation of any part of the mining industry would be the gravest possible disaster. The result was a majority of more than 16,000 against my opponent. We have seen an ever widening measure of State control and State assistance such as would make Salisbury and Balfour and even Cobden and John Bright sleep uneasily in their graves. When I heard the hon. Member for Berwick-on-Tweed (Sir Hugh Seely) addressing theHouse, I could almost have closed my eyes and imagined that Cobden or John Bright had come back. In the face of growing and intensifying economic difficulties, in the case, for instance, of coal and transport, any Government, no matter what its professions and convictions may be, will be bound to apply some form of public ownership in practice, because it will be, as in this case, the only solution for the immediate problem. But doing the right thing in the wrong way, as is being done in this case, is nearly as bad, as Lincoln said about old John Brown, as doing the wrong thing itself.
No one who has read the Cadman Report can fail to see that private enterprise has not enough enterprise to nurse an infant undertaking like civil aviation, for the very important reason, if for no other, that it cannot find the investor who is willing, in a case of this kind, to wait for a long period of development and research. The investor must have an immediate return on his money; he must have his 5, 6 or 7 per cent. at the end of the first financial year; and in these

circumstances there can be no considerable expansion and development of infant undertakings of this kind except under some form of public ownership and public control, and with some financial underwriting on the part of the Treasury. As has been said once or twice, even from the Liberal benches, the record of civil aviation under private enterprise, which is so clearly described in the Cadman Report and is so much within the personal experience of many Members of the House, is a record of poverty and inefficiency, of old-fashioned machines, of inadequate services and of unsatisfactory management, In these circumstances the State has no alternative but to come to its aid with the kind of subsidies that, so far as Imperial Airways are concerned, have been poured out during the last 10 years with no kind of State or Treasury control. The one redeeming feature of this Bill is that at least it gives the State some control over the money it is expending in this direction.
I am unable to reconcile some of the figures which are given, and I would beg a little help from the Under-Secretary in this matter. If he will look at the Air Ministry's statement on page 43 of the Cadman Report, and will total up the figures in column D, he will find that the total comes to £5,603,000. In the Imperial Airways' statement on page 85, I can only make the comparable figure something like £2,500,000 less, namely, £3,153,000. Then, in answer to a question which I addressed to the Minister on 5th June, I got still a third figure, which is not to be reconciled with either of the other two. If the hon. and gallant Gentleman can reconcile these figures for me, I shall be more than ordinarily obliged to him. Whichever of these figures may be the accurate figure, they seem to indicate that we are now buying back, within the terms of this Bill, capital values and profit expectations which the State itself has created by the subsidy commitments into which it has entered. Apparently even the present Government have been bound to recognise that that sort of experience cannot continue, and so a Bill embodying a form of public ownership is now before the House.
I should like to address myself for a moment or two to the wider terms of the Amendment. It does not quarrel so much with the administrative control provided


in the Bill; it quarrels with the Bill because it is totally inadequate to the existing situation, because, so far as civil aviation is concerned, it should have been, not exclusive, but all inclusive and all-embracing. I do not know how many internal air line companies there are, but the number must be very considerable, and there must be immense possibilities in the sphere of civil aviation. I have no respect for Tennyson as a poet, though I would not wish to offend the Victorian susceptibilities of any other Member of the House, but I have a very great respect for Tennyson as a prophet, and I have never been able to understand how, in "Locksley Hall," he could say:
Saw the heavens fill with commerce, argosies of magic sails,
Pilots of the purple twilight, dropping down with costly bales;
Heard the heavens fill with shouting, and there rain'd a ghastly dew,
From the nations' airy navies grappling in the central blue.
Unless there is to be some legislation of an all-inclusive and all-embracing kind, we shall have to go through, in the case of civil aviation, the same experience that we went through 100 years ago in the case of early railway development. Companies were floated to compete and conflict with each other, the investing public was gulled and fleeced in order to satisfy the rapacity of the company promoter. The history of early railway development shows that millions of pounds were lost on one fraudulent prospectus after another in those early days of railway development, to which I would liken these early days of the development of civil aviation. Even Gladstone could see, Tory Minister, curiously enough, as he then was, when he was President of the Board of Trade in 1844, that railways had to be nationalised in order to provide for an adequate measure of development, and there exists on the Statute Book to-day what is known as the Gladstone Act of 1844, which lays down the terms under which railways could now be nationalised if the Government cared to adopt those terms. I say that this industry, which requires the most careful development and research, needs the assistance of the Treasury and effective control by the State, not only over this exclusive area, but over the whole area of civil aviation, both internal and external. Because this half-hearted Measure

does not go as far as that, my hon. Friends and I will vote for the reasoned Amendment which has been moved.
6.28 p.m.

Marquess of Clydesdale: I do not propose to follow the argument of the hon. Member for Clay Cross (Mr. Ridley) on the question of an all-embracing Measure. I am afraid I do not altogether agree with him at this particular juncture in the progress of aviation. I listened with great interest to the speech of the Secretary of State, delivered with his usual lucidity, eloquence and charm of manner, but I would like to tell him quite candidly that I have certain doubts as to the wisdom of this Bill. My right hon. Friend pointed out that there would be a great advantage in pooling experience, ground organisation and resources, but he went on to say, or at least I understood him to say, that competition has never really existed between Imperial Airways and British Airways; and that, I think, knocks the bottom out of his argument in this respect. After all, I think it is generally acknowledged that the most efficient air lines in the world are the American air lines, which are run by private companies. The Secretary of State mentioned the American air lines, and went on to point out that such air lines as K.L.M., Swiss Air, and Sabena, are national concerns. These are all very efficient companies, but I rather wish he had given —perhaps he may be able to do so later on —some comparison of the grants that are made to these companies as compared with the grant that it is proposed to make to the corporation, for, after all, it is with these companies that the corporation will be competing.
I do not wish to follow that argument of private enterprise versus nationalisation. I have risen mainly to point out that in this Bill there appears to be a real danger of the corporation interfering with internal air lines. We had a bitter experience in the case of Imperial Airways, which was set up in 1924. The Secretary for Air at that time undertook a flight in the first air liner ever to fly to India. We looked forward then to Imperial Airways giving a lead to the world in regard to long-distance air lines. We hoped that they would connect up the Empire thoroughly and comprehensively. Those hopes have been shattered. Imperial Airways have, to a large extent,


developed their lines between London and Paris. That could have been done by much smaller companies. Their association with the railway companies I consider to have been a first-class blunder, and they have been implicated in the intolerable booking ban on travel agencies, which has done so much harm to air development in this country. On Empire air routes, Imperial Airways have been outstripped by K.L.M.; in Europe, they had been a laughing stock until quite recently, when the Empire Flying boats were started; and in this country, I fear, Imperial Airways have been more a hindrance than an encouragement to internal aviation. I believe that the Empire flying boats are a step forward, and I hope that they will be the forerunner of comprehensive expansion overseas.
Empire and internal aviation are completely different, but in this Bill the Secretary of State has power to allow the corporation to interfere with internal airways —in fact, to compete directly with internal air lines. I would ask the Air Minister whether he intends to give unlimited power to the corporation to compete, without reference to the licensing authority which is provided for in the Bill. As I read Clause 29, it removes the present discretion of the Secretary of State to increase the subsidy to internal air lines and prevents him from continuing the subsidy after 1943. Previously, the present subsidy was to have continued until 1953. This Bill may be definitely harmful to internal civil aviation. I have great confidence in my right hon. Friend, but I may not have nearly so much confidence in his successor; and these powers are also to be handed on to his successor. A certain amount of concern has been expressed on one point. After the Bill has passed its Second Reading, the Secretary of State is to move that it be referred to a Select Committee, and that all petitions presented after the Second Reading must be laid within five days. The British Airways Association who represent the interest of internal air lines, are very concerned about this point. It gives very little time for them to prepare their petitions, and I hope the Secretary of State will take that fact into consideration.
I hope that great expansion will take place, but here again we have been disappointed. In the Debate on the Cadman

Report the Air Minister was pressed to see that the air line which had been in existence between this country and Norway should continue. A company known as Allied Airways had run a successful air line from Newcastle to Norway, and the Norwegian Government had given them their mail contract. The company had made successfully 160 crossings of the North Sea. I felt that it was extremely important that Norway should be directly connected with this country, for this route was the most direct connection with Helsingfors, Leningrad and Moscow. The only other line was British Airways, and they ran —and still do operate —through Germany. In the case of an international emergency, that line would be stopped. Surely it is of the greatest importance to have an air line running; direct to Norway, and by the shortest route to Soviet Russia, so that it could continue in an emergency. I thoroughly endorse my right hon. Friend's wish that the military side should be displaced by the civil side. I feel that in the case of aviation, more perhaps than in any other industry, it is possible to transfer military side to civil requirements. We all hope that there will be a time when it will not be necessary to apply such tremendous-effort and expenditure to the military side, and when civil aviation will indeed bring countries closer together in understanding and friendship.

6.39 p.m.

Sir Edward Grigg: I congratulate the Secretary of State, without hesitation or reserve, on this Bill. My hon. and gallant Friend the Member for Wallasey (Lieut.-Colonel Moore-Brabazon) said all that I should like to say on the main principle. I have a fear that the critics, including my noble Friend the Member for Eastern Renfrew (Marquess of Clydesdale), have not suggested any possible alternative. I see objections to this course —as to any —but, on the whole, it seems to me to be the most practicable and certain. If the hon. Member for Clay Cross (Mr. Ridley) was astonished at a Government of this character introducing a Measure of this kind, I assure him that he is in for a period of speechless bewilderment during the next 20 years. A great deal more is to be done on these lines, and the hon. Member may prepare himself for surprises. On the question of prices, my opinion would be of no value at all, but


I listened with a great deal of anxiety to what was said about the communication addressed by Imperial Airways to its own shareholders before the announcement that the Government were to take over. I hope my right hon. Friend will investigate that. There may be some explanation, but it had, for me, a very unsavoury sound.
I rise mainly for one purpose —to deal with the question of the manner in which this Bill is going to affect the Dominions and Colonies. The concern of the Colonies is a direct one. They can claim to have a great say in civil aviation, inasmuch as some of them were a great deal ahead of the Imperial Government in the early days of civil aviation. I can say with some pride that when I was in East Africa Kenya was doing more for the East African air line than the Imperial Government would do at that time. The origination of these lines is due, to a great extent, to not only the keenness, but the subsidies of the Colonies. I assume that those subsidies, in some form or other, are still going on. I was very glad to hear what my right hon. Friend said about the representation of the Dominions and Colonies on the Board. I believe you will get the close co-operation of the Dominions and Colonies. It will be a wonderful thing if the board can be made representative of all the British-speaking parts of the Commonwealth —and indeed others —in aerial communication and transport.
There is one other point on which I should be glad of guidance. It is another aspect of the same matter. In Clauses 1 and 2 there are references to "the Secretary of State." In Clause 6 the reference is to "the Secretary of State for Air." I presume that, wherever the Secretary of State is mentioned in the Bill, the meaning is the Secretary of State for Air —not any Secretary of State. There is nothing about it in the Interpretation Clause. I take it that the intention of the Bill is that all the powers given to the Secretary of State mentioned are given to the Secretary of State for Air. No one knows better than my right hon. Friend that those powers are very wide. In Clause 6, he has power
to discontinue or make any change in any air transport service or other activity which 
the board are operating. That is a thing that may profoundly affect a Dominion or

Colony. I ask him to consider whether it would not be wise to provide that in the exercise of these powers he should share his responsibility with the Secretaries of State for the Dominions, India and the Colonies. I do not think it is desirable that those other Secretaries of State, who are going to be profoundly concerned, should have the right to approach him only as a colleague on friendly terms, and of asking whether he will consider this point or that. They should have a definite right of criticism, and it is desirable that this should be provided for in the Bill. Would my right hon. Friend in Committee give favourable consideration to an Amendment which made that possible —perhaps by inserting in Clause 6 some words about consultation with those other Secretaries of State? If he will do that, he will improve the reception that the Bill will get in other parts of the Empire, and will add very much to the chances that the Imperial Board —which he is so anxious himself to create, by means of appointments —will really, in due course, be realised.

6.45 p.m.

Mr. Benson: The hon. Gentleman the Member for Altrincham (Sir E. Grigg) will forgive me if I do not follow him on the points that he raised. I wish to get back to the main criticism of my right hon. Friend the Member for Keighley (Mr. Lees-Smith) on the financial arrangements arising under this Bill. The Bill arises, not through the sudden conversion to Socialism of the right hon. Gentleman the Secretary of State for Air, but from a realisation that he has to get himself out of the unutterable tangle into which he has already got himself. The situation with regard to airways and the Imperial Airways Company was such that something had to be done. I do not mean to stress the inefficiency of Imperial Airways, as most of the speakers who have spoken to-day have referred to it. One hon. Gentleman opposite referred to them as a laughing-stock, and I think that it was generally agreed everywhere that the company were inefficient and unsatisfactory. The Cadman Report stated that they were rapacious and uncooperative as regards the Government, and inefficient and unsatisfactory as regards the public. They were the chosen instrument, up to a couple of years ago, for an enormous expansion of flying.
In 1937 the Government allowed this company to raise £1,500,000 of capital. It was done by the consent of and agreement with the Government, The price was fixed as to the pound share. This was done in order to facilitate the development of an enormous Empire airmail scheme. The subsidy was doubled. It jumped from £560,000 in 1937 to £1,100,000 in 1938, in which year there was also an enormous hidden subsidy given by the Post Office of an annual payment of £900,000. This inefficient and unco-operative organisation was to become the nucleus of an enormous Empire air expansion. It simply would not work. The people who ran Imperial Airways were the wrong kind of people. They had proved themselves inefficient. The Cadman Report said that, although they were absolutely dependent upon Government subsidies, they were primarily concerned with their own selfish commercial interests. The result was that something had to be done. The right hon. Gentleman, having prepared for this enormous expansion, allowed the raising of £1,500,000 of capital, and made promises of subsidies amounting to nearly £2,000,000 a year, had to do something. When the right hon. Gentleman made his announcement, suddenly and apparently without any serious consideration, the shares of the company jumped by 3s., and when the Government announced the price which was ultimately to be paid there was another jump of 3s. The right hon. Gentleman defended himself by stating that the market value is not necessarily an adequate criterion, and I am prepared to agree, particularly so in the case of a company whose shares have been very largely a gambling counter. The shares of Imperial Airways have fluctuated, as the hon. Member for Clay Cross (Mr. Ridley) said, from 6d. up to 62s. You cannot take the market price as the absolute value, and I am very much of the opinion that, when the right hon. Gentleman made his announcement in November last, the market value was rather a high one.
The state of the company, as disclosed in the accounts issued in November, was by no means rosy. There had been an enormous drop in profits. It is true that they had paid 7 per cent. dividend, but they had only earned 7.8 per cent. They had paid out practically the whole of the profits they had earned, which

is certainly not a sign of strength or of conservation of energy. Even the directors had realised that they had to do a little window-dressing, and for the first time they produced a dividend equalisation account by taking £60,000 from the carry forward and £90,000 from contingency. The right hon. Gentleman said that the payments of the Government were not really subsidies but payments for services rendered. It is a matter of definition. The actual position was that this company, so far as its gross revenues were concerned, was dependent entirely for its very existence upon revenues which came from the Government. In 1938 it received £1,100,000 in direct subsidy, and £900,000 from the Post Office, and it received ground services, which, at a very conservative valuation, were worth £200,000 a year. Thus from Government sources it received £2,200,000. The company was, as my hon. Friend reminds me "living on the dole." It could only continue to live in that way, for its commercial income was only £800,000. The Government had created the company and kept it alive, and any further prospects that the company had were dependent entirely upon the Government.
The Government had outlined an enormous scheme of expansion with Imperial Airways as the instrument, but Imperial Airways, as the right hon. Gentleman himself has said, could not possibly carry it out efficiently and economically. They would have had to raise an enormous amount of capital, and the right hon. Gentleman himself said that they could not raise the capital except on onerous terms. If a company can only raise capital on onerous terms, its shares are not worth 32s. per £share; the shares of such a company cannot be worth more than par. The right hon. Gentleman assured us that the company would have to raise £3,500,000 of fresh capital in order to be enabled to carry the proposed development.

Sir K. Wood: The two concerns.

Mr. Benson: The two concerns together. It means that you would have to double the capital of the two concerns. We are told that the material assets that we are getting from Imperial Airways are worth £2,500,000, and we find among those assets flying boats as ancient as the Hannibal. What was the use of pro-


pounding a scheme of enormous expansion and attempting to use an instrument like Imperial Airways, whose plant was worn out and whose management was inefficient, presenting them, by virtue of the fact that you give them a 15 years' contract and a guaranteed subsidy, with a commercial asset which you had to buy back at an inflated price? The material and tangible assets amounted to £2,400,000. I asked the right hon. Gentleman while he was speaking what happened to the 25,000 deferred shares belonging to the Government, and he said that it was no use buying these because the money only came back to the Treasury. But these 25,000 deferred shares were worth a good deal more per share than the ordinary £shares. They were, in fact, a very important mortgage on the assets of £2,400,000.

Mr. Duncan: How can a deferred share be a mortgage?

Mr. Benson: It depends upon what terms the deferred shares were issued.

Mr. Assheton: Perhaps the hon. Gentleman will tell the House what were the rights of these deferred shares?

Mr. Benson: I am about to do that. The rights of these deferred shares on winding up were that, after the £1,600,000 of ordinary shares had been paid back £for £, the deferred shares would also receive £for £Any assets remaining would be divided as regards the first £200,000 on a 50–50 basis between ordinary and deferred shareholders, and thereafter on a 75–25 basis. What were those deferred shares worth on the valuation of the price paid of £2,600,000? They were, first of all, entitled to £25,000. Then they were to be entitled to half the first £200,000, and then there was £800,000 to be divided of which the deferred shareholders would get another £200,000. Thus the deferred shares were entitled to £300,000. The right hon. Gentleman said that they did not bother because the money would come back to the Treasury. The money ought to come back to the Treasury. The rights of these deferred shares have, as far as I can see, been entirely abandoned.
I started reading this Bill under the impression that it was a Bill to establish a corporation for the purpose of running airways, but when I came to examine it, I

found that the corporation could do practically nothing whatever without the direct consent of the right hon. Gentleman. They can buy property, sell property, provide hotel accommodation and set up committees and promote Bills in Parliament without asking his permission, but when it comes to anything in the nature of flying, they have to get the consent of the Air Minister. And even those very minor powers of which I have spoken are subject to a general consent and power of refusal. In fact, the Minister in his attitude to the corporation reminds me of a fussy mother who said to the nurse, "Go and find out what the children are doing, and when you have found out, tell them not to." What is the use of Setting up a corporation like this without any powers except under special permission? Where does the responsibility lie? We have had enough of divided responsibility in the past. This Bill merely perpetuates divided responsibility. In the past we have had divided responsibility, and a divided incentive; as far as I can see here we have exactly the same thing. If there is any efficiency in setting up a board and if that board is going to be more efficient than the Air Ministry itself, I suggest that we hand over the whole of air rearmament and the whole of the R.A.F. to a corporation. Would that make them efficient? Of course it would not. If you can run the R.A.F., which is an enormous concern, if you can trust rearmament to the Air Ministry, why cannot the Air Ministry run this? Why should you have a board intervening? You have no board in the Post Office, and nobody would suggest that a board should intervene there. Why not get rid of this divided responsibility? Why not let us be in the position of being able to supply criticism in this House when it is necessary? So far as I can see, the only effect of this cumbrous proposal to establish a board, and a board without real powers, is that it will be a useful screen behind which the right hon. Gentleman can, when he wishes, take refuge.

7.2 p.m.

Sir Alfred Beit: I should like to say a few words on the financial arrangements of this scheme, but before doing so I wish to address myself to the first part of the Labour party's Amendment, which seems to express regret that we are not now establishing "a national unified air transport system to be operated solely in the


public interest." I should have thought that the responsibility for efficiently developing the air routes to Europe, India, China, Malaya, West Africa, South and East Africa, Australia, New Zealand, Canada, the United States, the West Indies, and South America —indeed the whole globe —would have been a sufficient duty for any single corporation. I am therefore glad that separate and limited powers have been given to the Secretary of State with regard to the subsidising of internal air services.
A previous speaker has already pointed out that these internal air services offer an entirely different problem from the greater duties which attach to this corporation that we are discussing to-day. They have, in the first place, less strategic value, they require quite different types of aeroplane, and in a country like this, with its relatively small distances, its excellent road and rail facilities, and its poor climate, they offer far less commercial possibilities. Indeed, the only successful ventures in this direction have been those where water has to be crossed, such services as those to the Channel Islands, the Isle of Man, the Isle of Wight, and the Western Islands of Scotland. It would appear therefore that the £100,000 available for these services should be quite sufficient. But I would like to know, when the Under-Secretary comes to reply, what the Government propose to do after 1943, when this subsidy is determined. For my part I should like to see the responsibilities of this new corporation limited in certain directions, rather than extended.
I wish to refer especially to Rhodesia and South Africa, where there have been recently negotiations for the return of the Imperial Airways services to the Central African land route. I hope these negotiations will not mean that the corporation will oust all local enterprises from the field. It seems desirable, if the new corporation is to confine itself to obtaining and improving the through-trunk routes, that as much freedom as possible should be left to the local services in their own field. I do not mean to say that every Colony or Dominion served by the corporation should have the right of running its own section of the line, at the sacrifice of efficiency, speed or comfort, but I do urge that we should be careful to see that the through service is not operated by the

new corporation in such a way that it gets more of the traffic than properly belongs to a through service, because in the long runthe interests of all are best served by a suitable division of the available traffic between the two types of transport. I therefore hope that the individuality of such firms as Wilson Airways and the Rhodesia and Nyasaland Airways will be maintained. The Bledisloe Commission on the amalgamation of the two Rhodesias stated in their report:
Encouragement should therefore be given to the new Imperial Airways Corporation to extend its main trunk routes through the Rhodesias and South Africa on terms which take due account of the 'chosen instrument'.
The words "the chosen instrument" in this respect are rather confusing. The Rhodesian and Nyasaland Airways Company has on many occasions been the "chosen instrument" of the Southern Rhodesia Government, and from a strategic viewpoint, being the largest aircraft operating company in the Rhodesias, is the only body capable at the present time of providing a pool of trained pilots. Should the "chosen instrument" of the British Government therefore be allowed to swamp the "chosen instrument" of Southern Rhodesia? I do not think so. On the contrary, I hope that in such districts as those to which I have referred it will be possible to arrange for the pooling of local traffic in such a way as to give maximum assistance to local companies, and I should be very grateful for any assurance to this effect.
With regard to the criticisms that have been made during the course of this Debate on the financial terms of the arrangement we are discussing, the right hon. Gentleman who spoke for the Labour Opposition told us that he was not very well acquainted with Stock Exchange methods, and I must say that his subsequent remarks proved that that was indeed the case. I have great respect for him —I am sorry he is not in his place at the moment —because I studied under him a good many years ago at the London School of Economics, but I am very glad that the subject he taught me at that time was not finance. He attempted to establish the proposition, which he subsequently modified somewhat, that the market value of the shares represents the actual value of the undertaking. If he really thinks that, I wonder if he has any idea of what would have happened to the


value of Imperial Airways Shares had the Government gone into the market without warning and endeavoured to buy a million or more shares. The price, I think, would have risen to a far greater level than the actual price paid.
Of course, I do not mean to say that he did not reveal to us a rather unfortunate story with regard to the events of the morning of 4th May, and I hope we shall get some information on that. But I am surprised that he should think that the market price, at a time when the stock market had already been for the previous year in a period of unprecedented slump, should represent the capital value of the assets of the company. He also pointed out how much the shares had gained, but he omitted to say how much on previous occasions they had lost. Does he remember, for instance, that a few monthsprevious, at a time when it was decided to expand the activities of Imperial Airways, the Government had insisted on a new block of capital being floated at 30s. a share when the market price was over £2, and on that occasion there was an immediate slump in the value of the shares? Again, does the right hon. Gentleman remember that, at a time when the first issue in 1923 or 1924 of Imperial Airways shares was made, in spite of the bright prospects presented to the public in the prospectus, the shareholders in point of fact had to wait four years before they got any dividends?
I would like now to leave the Opposition Amendment and to consider to what extent the Bill will solve the principal difficulties from which civil aviation has suffered. I would list some of these difficulties as follows: —(1) a lack of adequate finance and subsidy, having regard to the continually increasing demand for new services, higher speed and the like; (2) a conflict of policy between the changing aims of economy, prestige, commercial success, and achieving supremacy over foreign air lines regardless of cost; (3) a conflict between the relative importance between mails and passengers; (4) differences of opinion as to the greater importance of developing European routes or Empire routes; and (5) inadequate coordination between Parliament, the Air Ministry and the "chosen instrument." I wonder to what extent the Government is satisfied that these difficulties will be got over by the terms of the present Bill.
There is one thing in the Bill with which I am particularly pleased, and that is that the new corporation is empowered to run a school for pilots. In this matter there has in the past been far too great delay. Imperial Airways have waited until several flying boats crashed before starting this much-needed institution. I think most hon. Members know that nine of the 28 Empire flying boats have come to grief, and with the possible exception of one which crashed through ice formation, all these accidents were due not to mechanical, but to human error. This. is an alarming state of affairs, and indicates that at the time when the expansion programme was adopted in 1936 there was a great shortage of pilots. Consequently men were transferred from land planes to flying boats without sufficient experience. Indeed the investigation of these crashes shows lack of experience, and in more than one case these crashes occurred on the first trip of the commander of the flying boat.
In connection with the employment of pilots I would like to refer to Clause 3 (2), which seems to make employment with the new corporation the private preserve of the Royal Air Force and the Auxiliary Air Force. Clearly, the Royal Air Force, with its short-service commission system, should be given every opportunity by the corporation when it comes to employing pilots, but why should they have this exclusive right? What about civilian schools like Hamble where young men are trained for three or more years in every branch of civil aviation, and where training in navigation, which is a most important aspect of training, is every bit as good as that of the Royal Air Force? I do not know whether I have misrepresented this part of the Bill, but it looks as if the pilots to be taken by the corporation in future will have to come out of the Royal Air Force or the Auxiliary Air Force. The analogy to that would be that those who are appointed to the Mercantile Marine should have been in the Navy first.
It seems to me that we are going a great step forward from the financial point of view in introducing this Bill. We are seeking to remedy the handicaps of the past, particularly the handicap of inadequate finance which faced the old Imperial Airways at the start. Everyone knows now what the borrowing powers


and the subsidies are to be, but we are not told how near to the maximum the Treasury is prepared to go, although we were informed by my right hon. Friend that the first instalment of Airways stock will be £7,000,000, which is not bad for a beginning. I should be interested to know what sympathy the corporation will receive in regard to Supplementary Estimates under Clause 25. I should imagine that the sympathy from the Treasury in the present state of affairs will not be very warm. An indefinite period must clearly elapse before the corporation becomes self-supporting. The duties of the corporation are incompatible with an endeavour to earn dividends for shareholders, and therefore I welcome the fact that the ordinary shareholders are to be superseded.
Could the Minister give us an undertaking that the new corporation will be given definites instructions as to what it is to do, and then it will be given reasonable freedom of action to do it? Can we hold out any hope that before we set this new corporation on its course, its course is the one which Parliament desires, and that we in Parliament will have only ourselves to blame if the future is not quite as good as we hope it may be. We have been told that there will be greater power in future not only to criticise the activities of the corporation but to ask questions in regard to its activities. My right hon. Friend said that there would be opportunities, as there have been in the past, to discuss these matters on the occasion of the Air Estimates, but shall we be able to ask questions in a more satisfactory manner than has been the case in the past, when those questions have had to be referred to the chairman and the board of directors? I hope that in view of the fact that the Government are now becoming the dominant factor in the affairs of this great concern, it will be easy for us to obtain the information we require in regard to its activities.
I should like to make a small suggestion in regard to the name of the new corporation. The hon. and gallant Member for Wallasey (Lieut.-Colonel Moore Brabazon) spoke of the cumbrous name given to the now corporation. I join whole heartedly in that complaint. Whatever we may have had to say about Imperial Airways, it was a very well known name throughout the world, and I do not see

that its successor, the British Overseas Airways Corporation is going to be a very satisfactory name. I should like to suggest as an alternative that my right hon. Friend should between now and the Committee stage consider two other names —the Universal Airways Corporation or, better still, the Royal Airways Corporation, which would have the advantage of having for it's initials R.A.C.

7.20 p.m.

Rear-Admiral Sir Murray Sueter: The hon. Member for South-East St. Pancras (Sir A. Beit) has suggested a new name for the corporation. I would suggest to the Secretary of State for Air that the name should be the British Empire Air-ways Corporation, for short, B.E.A. That would compare favourably with K.L.M. Air France, Swiss Air, and so on. I have read through the Bill very carefully and listened to the able and lucid speech of the Secretary of State. We have to ask ourselves whether the policy outlined in the Bill will provide efficient civil aviation and will ensure that our overseas air transport will be carried out at a reasonable charge. When the Secretary of State for Air was Postmaster-General he set up an air panel to go into the whole question of the delivery of mails, where they could be accelerated by air. That panel sat, and Sir Frederick Sykes and I found that Imperial Airways was rather overloaded, and we suggested that another company should be encouraged. Later, British Airways was encouraged and given a subsidy. They were not in competition with Imperial Airways, because they did not do the same work. They gave us a good deal of comparison data as to how a company should be run, and they were of very great value.
If we amalgamate these two companies, as outlined in the Bill, economically ft will be much better, because we shall be able to pool our administration, operations and staff. There will be the same methods of training of pilots and personnel. It will be altogether more beneficial economically to amalgamate the two companies into one corporation. I see no reason why the new corporation should not be as efficient as the B.B.C. or the London Passenger Transport Board. I would ask the Secretary of State for Air to see that the corporation acts a little more speedily than the Central Electricity Board. It took me


15 years to get electricity installed into my house in the country, after it had been promised by Lord Mount Temple, who was then Minister of Transport, that we should have it very speedily. I hope, therefore, that the Secretary of State for Air will see that the new corporation are a little more speedy than the Central Electricity Board.
Much depends on who are chosen for the personnel in the corporation. I see that there is to be a chairman, a deputy-chairman and not fewer than nine or more than 15 other members of the board. I hope my right hon. Friend will not allow the corporation to be the dumping-ground for ex-governors, or hangers on of any political party who want jobs. You want to choose the members of this corporation from certain business men of great repute, and the remainder should be airmen who have some knowledge of the air —men of great vision. That is what you want in order to make the corporation a success. I hope my right hon. Friend will give me an assurance that live-wire men will be chosen for the corporation, and that some of the members of the board will be representatives of the Empire.
I hope, also, that the Secretary of State will see to it that the corporation set up a planning panel. It is over four years since the hon. Member for Bury (Mr. Chorlton) and myself went to the Air Ministry and had a conference with the Director-General of Civil Aviation about the West Indies. We suggested the establishment of an inter-island air service in the West Indies connecting Antigua, St. Lucia, Barbados, Jamaica and British Guiana. We laid the whole thing before the Director-General, but it was only last Wednesday that the Undersecretary of State for Air said that the Air Ministry recently had a technical expert in the West Indies to go into the whole question. That is four years after we had laid a complete scheme before the Air Ministry. What is wanted is a planning committee to go into the whole question of establishing new air routes. The Australian flying boat Guba has just flown from Australia via the Cocos Islands, the Chacos Archipelago, the Seychelles Islands and Mobassa. There may be alternative routes and other routes that ought to be looked into by a planning committee, particularly a

trans-Pacific route. I hope, therefore, the Secretary of State will see that a proper planning panel is appointed.
I should like some assurance with regard to the ordering of machines. The Air Ministry set up a committee to go into the question of the production of civil aeroplanes. Eighteen months ago the members of my Air Committee gave evidence before the Cadman Committee. We suggested that there should be set up a civil aviation development board. I notice now that the Harold Brown Committee have come to the same conclusion, but they call it the Civil Aviation Development Committee. I would suggest to my right hon. Friend that when he wants any constructive proposals he should come to the Air Committee of his own party, because we were 18 months in front of the opinion which has been arrived at by the Harold Brown Committee.
In regard to the ordering of machines I am not quite clear how it is to be done. Suppose you want certain machines for carrying out the West Indies Inter-Island Air Service —amphibian machines. Suppose the corporation wanted £100,000 worth of amphibian machines. Would they go direct to the Air Ministry and say they wanted these machines, or would they have to go to the Civil Aircraft Development Board, and get their concurrence before the Air Ministry gave approval for the order? Suppose the order for these amphibians turned out to be a dud order. Suppose the machines could not fulfil their purpose. Perhaps the engines could not reach the horse power that was necessary. Who would be responsible? Would the Air Ministry. the corporation or the Civil Development Aircraft Board be responsible? These practical points ought to be gone into and made very clear.
Now I come to the internal air service. Will the corporation be able to run internal air services between, say, the Channel Islands, Guernsey and Jersey, and come into competition with existing internal air services? The increased subsidy for the new corporation is, I understand, to be £4,000,000 a year less the £100,000 a year allocated until 1943 for the internal air lines. Did not the Air Minister give a pledge that the internal air services would get the £100,000 for the next 10 years until 1953? We ought to


look very carefully into the subsidies that have been promised to the internal air lines. 
The hon. Member for Chesterfield (Mr. Benson) made an attack on Imperial Airways. It is the fashion to attack Imperial Airways, but, after all, they have done great service to the State. I think Sir Eric Geddes and Major Woods Humphreys have done uncommonly good work. You have only to look up what happened last year. Over 800 tons of first-class mail were sent to Europe, and between 1,100 and 1,200 tons of first-class mail were sent by air to the Empire. Somebody arranged all that. It is a very great achievement, and represents millions of letters which have been sent all over the Empire and to all parts of the world for 1½d. per half ounce and id. per postcard. I submit that when you close down Imperial Airways the Secretary of State for Air should confer with the Postmaster-General and see if some recognition cannot be given to those men who have been responsible for carrying out such a great achievement. Exactly the same thing applies to the pilots of Imperial Airways who have done very great service, and also to the constructors of the flying boats. I would ask the Secretary of State to make a note of this and see if these services cannot be recognised in some way.
There is only one other point I desire to deal with, and that is Parliamentary control. I think there will be enough criticism in this House when the Secretary of State for Air presents his Estimates. I understand there will be a report of the corporation, and that we shall be able to discuss it. I would ask the Secretary of State for Air to arrange with Mr. Speaker that not too much detail of the internal administration of the corporation shall be allowed to be discussed in this House, otherwise we may get the grievances of pilots and so on put forward, and weshall have a little too much of it. We have had quite enough of Imperial Airways in the past, and we do not want to be overburdened with internal criticisms of that nature. During the War we built up from practically nothing with the good help of the Royal Flying Corps, the Royal Naval Air Service and the aircraft industry, a great air service which was second to none in the world. If we can do that in war time, surely we can develop civil aviation on great lines in peace time. We

have the finest pilots in the world, fine designers, great constructors and engine builders. This corporation will have a wonderful opportunity. We want to secure all the air traffic we possibly can in exactly the same way as the Mercantile Marine have been the water carriers of the world for so many years. We want to do just the same in the air, and this corporation will have a wonderful chance. It will have to develop high speed machines for carrying air mails and lower speed machines for carrying passengers and light merchandise, and should carry that all over the world for the benefit of this country and Empire.

7.35 p.m.

Sir George Schuster: I want to intervene for only a few moments. The Debate has covered most of the aspects of the Measure and I rise as one who wishes to congratulate the Secretary of State for Air very heartily upon having brought this proposal before us. One of the criticisms which have been levelled from the other side is that this is a Measure to get him out of the intolerable mess in which the Government now find themselves owing to the relations with Imperial Airways. I do not imagine that the Secretary of State for Air is very much worried by that kind of criticism, because everyone who has examined the history of the relations between the Government and Imperial Airways must be ready to admit that there is some justice in the description of these relations as a mess, from which it is desirable in the public interest we should extricate ourselves. One thing, indeed, which we learn from the history of these relations is that where an enterprise cannot be effectively carried on as a commercial enterprise but must rely on a very large measure of State assistance, it is most undesirable that private shareholders' interests and possible speculators on the Stock Exchange should get mixed up with a venture of that kind. The past history of Imperial Airways shares shows only too clearly what evils may result from that sort of relationship.
I need not take the House over past history. I will only refer, in passing, to those incidents in 1937 when, it will be recollected, Imperial Airways' shares stood as the result of speculation at something like 62s., after they had even been up to 67s. 6d. in 1936, and that when a new issue had to be made and the


question of what was a fair value to put on the shares had to be discussed between the company and the Treasury, the decision was reached that the shares ought not to be issued at a higher price than 30s. Hon. Members will probably recollect the unfortunate criticisms to which this circumstance gave rise, and on the ground alone that this new plan will avoid any repetition of such incidents I heartily congratulate the Secretary of State and I heartily welcome the Measure.
The one subject upon which I wish to say something is the price at which these undertakings are to be acquired. I agree with what was said by the right hon. Member for Keighley (Mr. Lees-Smith), that the Government in circumstances of this kind ought never to pay more than a private individual who was making the purchase would have to pay. But the right hon. Member then went on to criticise the Government for doing exactly what a private individual would have done in the circumstances. The Government employed a first-class firm of chartered accountants to make an examination of the company's accounts, to go over its assets, and it is mainly on the basis of the accountant's valuation of the assets that the purchase price has been fixed. I submit that that is exactly what a private individual would have done in the circumstances. A great deal has been said as to the relation between the price which is being paid under the proposal and the price at which the shares were quoted on the Stock Exchange. I put it to hon. Members opposite that that type of argument is extremely misleading. I have been interested in the subject and have taken the trouble to make some inquiry as to the number of shares in Imperial Airways which normally change hands, so as to get some idea of what is the normal market in the shares. On referring to the three leading jobbers in Imperial Airways share market who handle the greater part of the transactions in these shares, I find that during the month from nth April to nth May of this year they bought altogether 9,435 shares and sold 9,877.
I may remind hon. Members that in many cases the same transaction may appear two and three times separately. These transactions took place in lots of 100 to 250 shares, and what we are discussing is what the Government ought to

pay for acquiring 1,624,000 shares. The mere fact that in the month up to the nth of May shareholders were ready to sell 9,435 shares at prices less than 32s. 9d. is absolutely no guide at all as to what the Government ought to pay when they acquire the whole undertaking. I think it is true that the vast majority of the shareholders of Imperial Airways were not willing sellers at all, and we must also remember the conditions under which we are living and under which this recent transaction has taken place. We have been living under the shadow of a great international crisis, there has been no reality in the stock markets at all. Some people have been anxious to sell shares. at any price regardless of their value, but on the whole markets have been completely lifeless. The quotations which one sees really do not represent the basis on which dealings in any large number of shares can be put through, and to base any argument as to what would have been a fair price on what has been in fact the ruling quotation day by day for Imperial Airways shares is to use an argument which has no actual value at all.

Mr. Montague: The hon. Member seems to miss the fact that the market has been pushed up as a result of this operation. That makes a big difference to the argument.

Sir G. Schuster: I am not quite sure what the hon. Member has in mind when he refers to the "result of this operation." I am perfectly prepared to admit, as anyone who studies the history of this concern must admit, that any valuation put upon Imperial Airways shares must rest largely on their relations with the Government, and therefore, I think there is a good deal of force in the argument which has been advanced and put to the Government, that they are buying an undertaking whose value they themselves have created. I do not wish to deny that, I am not speaking in any defence of past history. I am addressing myself to the practical question what should the Secretary of State for Air have done when he had taken the decision not to continue a state of affairs which was contrary to the public interest, and that he ought to acquire this undertaking for a public statutory corporation? If you put the question in that way I think the hon. Member must admit that the price you pay must be a


fair price according to the present value of the undertaking, even though that may have been built up in the past on the basis of its relations with the Government. That was the position which the Secretary of State had to face and he faced it as any business man would face it, on a basis of valuation and mainly on a valuation of the assets. He arrived at that valuation by means which any ordinary business man would have followed, and I put it to the House that what was the actual quotation on the Stock Exchange for the shares has really no significance at all, and that the Secretary of State is on firm ground when he says that he fixed a fair value according to the undertaking he has taken over.
A good deal has been said about Imperial Airways, but very little has been said about what is being paid in the case of British Airways. It is worth while to pay a little attention to that case because it helps one to see the matter of price better from the point of view of those whose undertakings are being taken over. Imperial Airways are comparatively fortunate. They have been in operation for some time. They have got through the stage of paying out the money which they had to pay out in building up their organisation and gaining experience, and have got into a position where they have built up tangible assets of considerable value. British Airways have been caught at a much more. unfortunate moment. They have not been operating so long. The greater part of what they have paid out in the past has been paid out in running unremunerative services so as to get into the field and build up their organisation. They have not got tangible assets to show for this part of their expenditure. If hon. Members will look at the matter from the point of view of the man who put his money into that undertaking, I think they will appreciate that there is another side to the question.
I have seen the figures in support of the contention I am about to make; the figures can be easily verified, for there is no secret about them. Moreover the people who put their money into British Airways have been the same people all the way through, because it has been a private undertaking, with large financial houses interested in it. It is not like Imperial Airways whose shares have changed hands many times. If hon. Members go

back to the beginning, they will find that for what those shareholders are now to be paid 15s. 9d. they have, in fact, spent, if one allows them a reasonable rate of interest on their money, a sum of 27s. 6d. I do not say that the deal has been an unfair one, but if one looks at the matter from the point of view of the people in that undertaking, who were by no means anxious sellers, one sees that there is another side to the question. I can tell the House that there are some very responsible City people who feel that my right hon. Friend the Secretary of State, with the Treasury behind him, has driven a very hard bargain indeed. I would not go as far as to say that. Looking at the two companies, and looking at both sides of the question, I think my right hon. Friend has fixed an extremely fair price, and that it would have been very hard to get nearer to equitable justice than under the scheme which he has put forward.
There is another point I would like to put to the House in connection with the price that is to be paid for these undertakings. It seems to me to be important that we should keep our sense of proportion. We are discussing now the purchase of two undertakings for the sum of about £3,250,000. Those undertakings are going into the hands of a corporation which, as the Minister told us, it is already contemplated will make capital expenditure of a further £7,000,000. They are going into the hands of a corporation which is to have the right to ask for, and I believe to a great extent the right to-control the expenditure of, grants from the Government of £4,000,000 a year. The price we are considering is a question of £3,250,000. Surely that is a relatively small amount and the latitude by which it could possibly have been varied is smaller still. By the most extreme exercise of the imagination as to what my right hon. Friend could have got, always-intending to be fair —and I am sure that hon. Members opposite do not suggest that he should be other than fair —if he had driven the hardest possible bargain, consistent with fairness —by what amount could he have varied the sum of £3,250,000? I suggest that at the very most he might have squeezed down the offer by another £250,000. The statement in the Amendment about submitting this great undertaking to unduly heavy capital burdens really boils down to this, that possibly they might have saved


3 per cent. or 4 per cent. interest on £250,000 a year. If one looks at the matter in that way, one sees it in its true proportion, and then, to say the least, one sees that the wording of the Amendment is based on an exaggerated conception of the position.
There is only one more point —a point of a general nature —in connection with the price to which I want to refer. It seems to me —and I believe the view is shared widely in the House —that, taking into account the way in which things are going, it is quite likely that over the next few years on many occasions private undertakings will, for public reasons, be acquired in a similar manner to that which is now being proposed, so that they may operate not merely from the point of view of making commercial profits, but in order to fulfil some public purpose. If that be the sort of condition in which we are living, I put it to hon. Members opposite that it is very undesirable to create an apprehension that, whenever the State thinks it advisable to acquire a private undertaking, it will do so only on terms which, if they err at all, will err on the side of harshness. I would put it exactly the other way round. I think it would be most valuable and would tend to the continued operation of this kind of undertaking in the best way in the public interest, if the impression were created that when it is necessary to acquire undertakings of this kind for a public purpose, the terms offered will, if they err at all, err on the side of generosity. I believe that would be to the public advantage.
In saying that, I do not speak as one who is defending the capitalist interests as such. I say openly that I should like to see capitalists, men of wealth, taxed as heavily as may be necessary in the interests of the country, and if necessary, for the sake of a redistribution of purchasing power on the proper distribution of which the prosperity of this country depends; but one may feel that as strongly as one can and yet feel unwilling to see any particular class of capitalist enterprise, particularly if it is a class of enterprise which the State is likely to want to acquire in the public interest, selected for penal treatment. A good deal of what has been said by hon. Members opposite seems to me to be based on the

view that if these enterprises are to be acquired they must be acquired on harsh terms; in fact, that if there is to be Socialism, or any advance towards Socialism, it certainly must not be "Socialism without tears."

7.54 p.m.

Lieut.-Commander Fletcher: I support the hon. Member for Walsall (Sir G. Schuster) in what he said about the price to be paid for British Airways shares. There is a great contrast between the 15s. 9d. to be paid for the shares of British Airways, which worked up on private money only to a position at which it qualified for a subsidy, and the 32s. 9d. which is to be paid for the shares of Imperial Airways which has always enjoyed a subsidy and which has paid the dividend out of that subsidy which formed the basis of the price of its shares on the market.
There are one or two points I wish to put to the Minister in regard to internal air lines. As I understand the Bill, the Corporation is not to be allowed to run internal air services, but it may do so with the permission' of the Secretary of State, although the Secretary of State certainly did not give us any indication as to what are likely to be his views on that matter. However, in page 30, line 30 of the Bill, it will be seen that the Corporation is to purchase all the assets of Imperial Airways. I understand that those assets include a one-fifth holding in Railway Air Services, so that the Corporation, when it does acquire all those assets, will acquire an interest in Railway Air Services. By contrast, in page 34, lines 25 to 30, it will be seen that the British Airways holdings in Scottish Airways and other companies (in which the London Midland and Scottish Railway also hold stock) are not to be taken over. In fact, I believe that British Airways sold their holdings in Scottish Airways either to the London Midland and Scottish or the Railway Air Services —I am not quite sure which —for £20,000, although previously they had been offered £25,000 by North-Eastern Air Lines, which is, of course, independent of the railways. British Airways did not want to sell their holding and agreed to do so only as a result.of the provisions of this Bill.
In contrasting the treatment of Imperial Airways with that of British Air-


ways in this matter, I cannot help asking myself whether, behind this Bill, there is a move to bring all internal air services under the control of the railways, in whose air services the Corporation will have an interest as a result of its purchase of the assets of Imperial Airways, and whose air services the Corporation will probably operate as successor to Imperial Airways, which is already the operating instrument for certain of the internal air lines. In this connection, I note, as did the hon. and gallant Member for Hertford (Sir M. Sueter), that by this Bill the period of the subsidy for internal airways has been cut down from 1953 to 1943, and there is also a rigid restriction on the amount of the subsidy which may go to internal air lines it being limited now to £100,000 although prior to the Bill the amount could be increased at the discretion of the Secretary of State. Those are points in regard to internal air lines as affected by the Bill with which I hope the Undersecretary of State may be able to deal.
Like all my hon. Friends, I am not very enthusiastic about the Bill. I hope that it is, at any rate, a definite indication that the Government have finally settled on a satisfactory long-term policy of development of British overseas aviation, because in the past our civil aviation certainly has suffered from too many changes of policy and too much chopping and changing altogether. About 15 years ago, we had a number of competitive companies. Then there was the Hambling Committee, which set up the principle of the "chosen instrument," that "chosen instrument," of course, being Imperial Airways, and they were given a mandate on the basis that they should try to arrange for civil aviation to fly by itself, without a subsidy, as soon as possible. That pious hope was defeated by foreign competition. Mainly owing to foreign competition, I think, that policy failed, and then came the doubts and disagreements which resulted in the setting up of the Cadman Committee, which showed that development was being hampered by inadequate subsidies, and recommended that the subsidies should be vastly increased and that the competitive element should be reintroduced. We had hardly started on the new policy of increased subsidies and reintroduction of the competitive element when the Government again changed their mind

and introduced this Bill, which says that these two services, Imperial Airways and British Airways, shall be married in accordance with the provisions of the Bill.
It is for these reasons, because of these many chops and changes in policy as regards civil aviation, that I think we ought to examine this Bill very carefully indeed where the question of Parliamentary control is concerned. The whole history of civil aviation goes to show that it would not be where it is to-day but for the Parliamentary criticism which has been continually levelled and the interest which Parliament has shown in the matter. As regards Parliamentary control, in line after line of the Bill it is laid down that the new Corporation may or may not do certain things without the consent of, or without consulting, the Secretary of State. I believe that is absolutely necessary in view of the very large amount of public money which is to be used in subsidies, but I am inclined to doubt if the powers that are reserved to the Secretary of State in this respect are of a kind which will enable Parliament to have the kind of control which would be beneficial. I certainly think it is desirable and right that the Corporation should be as free as possible to carry out the mandate with which they arc being entrusted without day-to-day interference by the Secretary of State on matters of routine, but, looking back over past history, we find that matters continually arise in regard to civil aviation which have caused very considerable interest and concern to Parliament, and I think that has been to the benefit of civil aviation.
Parliament has always shown itself very interested in this question of the development of civil aviation, but in the first Schedule of the Bill it is laid down that no member of the new Corporation shall be a Member of this House. I think that is an excellent provision, but I am not sure that we should not do well to have a Member of the House on the board in an unpaid capacity, in exactly the same way that Members of Parliament work on the Bacon Marketing Board, the Pigs Marketing Board, and the Forestry Commission. Members of the House associated with those boards are not finally responsible for policy, but they are able to give us first-hand information about the activities of those bodies when matters affecting


them come up for debate. I should like to ask why we cannot have the same thing in connection with this new Airways Corporation, and then in Debate we should have someone on the spot with first-hand knowledge of what is going on who could probably save the House a great deal of unnecessary trouble and inquiry. The difficulty which the Secretary of State will certainly experience in connection with a Corporation of this kind will be that, while he has the ultimate responsibility, he naturally will not want to interfere too much in matters of day-to-day policy, and on that account he will not be always able to deal fully or adequately with criticism that may arise here, criticism which can quite easily develop to a very undesirable extent if it cannot be dealt with as it arises.
There is another point in the Bill about which I should like to ask. Is the Secretary of State really satisfied that the maximum capital of £10,000,000 which is laid down is really sufficient? This Corporation is to have the responsibility not only of operating existing air services to China, India, East and South Africa, but as time goes on it will extend its operations to West Africa, South America, and across the North Atlantic to the United States and Canada. Not only are these additional lines to be operated in the future, but there is to be a general speeding up and multiplication of the existing services. The authorised share capital of Imperial Airways is £5,000,000, the issued capital is just over £1,500,000, of which the market value is about £2,500,000, and there is in addition the capital of British Airways which is to be merged in it. Having regard to these considerations, does the right hon. Gentleman really consider that £10,000,000 will be a sufficient maximum capital for the new corporation, having regard to the very much greater responsibilities that it is to have, and the fact that the Bill is to cover a period of 15 years? I fully appreciate that subsidies up to a maximum of £4,000,000 a year are contemplated, but I should have thought in the long run it might be better, possibly, to provide for more ample capital resources, and make certain savings in the subsidy.
There is one other point concerning finance to which I should like to refer. Clause 25 lays down that there may be supplementary grants in any accounting

period if the Corporation undertakes any additional air transport service or other activity which is not included in the original programme, but I cannot see that the Clause makes any provision for other unexpected circumstances which might necessitate additional grants. I imagine that the Corporation will in very many cases be operating in competition with foreign air services and they may find that their revenues are being seriously cut into by such competition, or that their business is being damaged through foreign air services cutting their rates. In such a case what would be the position of the corporation? Whether they cut their rates or not, they might find that they needed a larger grant to enable them to face that competition. I cannot see that the Clause makes any provision for that kind of eventuality. I think these points that I have brought forward are important, and I hope that some of them, at any rate, may receive a reply.
As to the Bill in general, it seems to me to ensure the worst of both worlds. The Corporation is to be run by private money, with subsidies and with guaranteed dividends, but it can take practically no action whatever without the leave of the Secretary of State, and it is to be free from competition. The good points of the Bill seem to me to be that it gives us the basis at long last of a satisfactory long-term policy, and it shows that the Government realise the necessity for substantial expenditure if civil aviation is to be built up and established upon a really satisfactory footing. I do not like the Bill and I shall support the Amendment, but if the Bill eventually goes through, even in an amended form, one can only say that it marks one more stage in the very limping, halting progress of civil aviation, and one must hope, for the good of civil aviation, that the marriage between these two companies which the Bill effects may be a happy and a prosperous one.

Notice taken that 40 Members were not present; House counted, and, 40 Members being present—

8.11 p.m.

Mr. Bracken: Before this interlude, the hon. and gallant Gentleman the Member for Nuneaton (Lieut.-Commander Fletcher) said the House takes very great interest in civil aviation. I am glad to see that it is taking a compulsory interest at the moment in these problems. It is


probably a pity in some ways that we do not have a better attendance at these Debates. But the hon. and gallant Gentleman really behaved in a very ungrateful fashion, because he looked the Government's gift-horse in the mouth. It is very wrong that the Socialist benches should criticise this sort of Measure at all. The best that you can say about it is that it is bureaucracy run mad. First of all, it is completely contradictory to the recommendations of the Cadman Committee. I do not quite understand the methods of the Government. They appoint a Committee, it spends a great deal of time in examining every aspect of the problem it was asked to solve, and then the Government scraps its report, and brings in something diametrically opposite.
Some of the arguments used by the Secretary of State in favour of the Bill were not impressive. But I think the Secretary of State can get away with anything. He comes to that bench with the greatest amiability, he nods his head at every suggestion, he keeps the House in perfect good humour, and he gets away with legislation which no other Minister could possibly hope to get through the House. To-day he used a series of very curious arguments. He said, for instance, that because these two companies were subsidised they should be amalgamated. But the Government are engaged in subsidising a large number of shipping lines in all parts of the Empire. Is it suggested that it would be a good thing for Great Britain if you amalgamated all the shipping lines into one company? If it is logical to amalgamate these air lines, it seems also logical to amalgamate all subsidised shipping. But I think logic is not what should really govern us in this matter. What saddens me is that air, the youngest and one of the most complex of all our transport enterprises, and the one which seems to me to have the greatest future of all transport enterprise, should be put under the control of a bureaucracy which can be guaranteed to damp down all the initiative that such a young service requires. It shocks me very much to see Imperial air transport put under the control of these commissions formed on the basis of the B.B.C. and the London Passenger Transport Board.
I wonder if hon. Members are very wise to accept the idea that these boards

solve every one of the problems. I remember the time when hon. Members on the Socialist benches were full of praise for the London Transport Board. Do they like it as much now? I know that co-operative associations and trade unions and Socialists in my constituency are condemning it with all their might for having increased fares and not giving proper transport facilities. But this is not really a party matter. I ask hon. Members, particularly Socialist Members, to consider whether we are very wise to semi-nationalise industries and put them under the control of these uncontrollable corporations. I believe it would be much better to socialise them outright, because then we would have some control left, than to put them under the control of what is called an independent board with no shareholders to criticise that board, and few, if any, opportunities in Parliament of criticising them. That, I suggest, is a complete negation of democracy.
Look at the incredible system of committees which is being set up under this Bill. You have first the corporation —then the board to the affairs of which a large part of the Bill is devoted. Then you have the executive which, I presume, will run the business. On top of that you have what my hon. and gallant Friend the Member for Wallasey (Lieut.- Colonel Moore-Brabazon) described as the C.A.D. Committee and, above that, there is the Secretary of State for Air and the Air Council. As far as I can see, the Secretary of State can sack the whole board. It is an amazing system. After all the talk we have had about this great enterprise and the wide powers that were to be given to the board, and the wonderful way in which they would perform once the organisation was set up and all the smoothness with which they would function we have this Bill which enables my right hon. Friend to sack the lot. Some day there may be another Secretary for State. Suppose one of the hon. Members above the Gangway were to become Secretary of State. He could sack the whole lot without any interference from this House. It is, as I say, an incredible position. My hon. and gallant Friend the Member for Wallasey said that this Bill was the dream of airmen, the dream that they had nourished for years. It seems to me more like the dream of the bilious, bitter Karl Marx—

Mr. Poole: A nightmare.

Mr. Bracken: If you like, a nightmare but a Karl Marxian nightmare because the Bill has got none of the virtues, if one can use such a word in relation to nationalisation, and likewise it has none of the virtues of what is called private enterprise. It is, if I may use such an expression on this occasion and in this company, a bastard Bill and will please nobody. It will not work in practice. To set up a board of this type and to put it into competition with the powerful and ever growing American air enterprises is just to subject British civil aviation to one further defeat. If anyone tried to persuade me that the Americans would set up a contraption like this to run their airways, he would have to argue for a long time. At least the Americans believe in the spirit of private enterprise in the air. There was a time when I thought this Government believed in the principle of private enterprise, but I have been learning a lot lately. Ministers on the Front Bench—there are only two of them at present, or perhaps I ought to say one-and-a-half, because there is only a Minister and a Whip —the Ministers who father this Bill, and there is a nice collection of names on the back of it including three Secretaries of State, the Chancellor of the Exchequer, the Attorney-General, the Postmaster-General and my hon. and gallant Friend the Under secretary of State for Air—

Mr. George Griffiths: What more do you want?

Mr. Bracken: What I really want is an explanation. I would ask Ministers to remember for a moment the speeches which they were making about proposals of this sort in 1931. Those were wonderful, and, indeed, moving speehes. I remember hon. Members above the Gangway being condemned on moral grounds for having suggested the nationalisation of the banks —that bogy of the old women in this country, male and female. For my part I believe that it is easier to manage the banks than to manage air transport in the conditions which prevail in the world to-day. It is not a very difficult thing to manage a bank, but I should like to know where the collection of geniuses is to come from, to control this new Imperial Air Board or whatever the Secretary of State calls it. I am shocked to the core by this proposition of a Tory Government. I am

deeply sorry that this young industry is to be subjected to this curious bureaucratic type of management which is neither Socialism nor capitalism, which is neither fish, flesh nor fowl, but just a curious crazy experiment which must, in the end, do harm to the air interests of Great Britain. Many of us have a real belief that the air is the most hopeful of all methods of transport for the British Empire. Now we propose to hand air transport over to a board of bureaucrats controlling the crazy contraptions to which I have already referred.
It is indeed a great pity that the Government should do this thing. I really wonder whether the Government can continue for very long to retain the support of Members of the Tory party throughout the country if they are to bring in Pills like this. I often wonder who puts the Government up to Measures of this type. I am certain it cannot be the good Tory Ministers who I used to know when they were so bitterly opposed to nationalisation, municipalisation and every other form of Socialism years ago. Can the inspiration for these Measures come from some of those refugees who are now in high places in the Tory party and the Government —Liberal refugees and Socialist refugees? I am very much afraid that those gentlemen have played havoc with the party morals of the Tory party. In fact, their conduct as expressed in this Bill reminds me of a saying by Mr. Burke:
The rats are no longer tolerated for the sake of the ship; the ship is now being kept up for the sake of the rats

8.22 p.m.

Mr. Simmonds: I should like to say not only that I greatly enjoyed the speech of my hon. Friend the Member for North Paddington (Mr. Bracken) but that, very largely, I agreed with it. Having followed closely the development of British civil aviation for the last 20 years —though never having had any financial interest in it —I am dismayed at the prospect which this proposal opens before us. I am at a loss to understand why my right hon. Friend the Secretary of State, for whose achievements in the military sphere, at the Air Ministry, the House on all sides has the highest regard, should have presented a Measure of this kind, which seems to sterilise the efforts now being made to rid British civil aviation of those


lets and hindrances so frequently discussed in this House of late.
I believe that my right hon. Friend cannot have realised the full import of this proposal and I take leave to hope that as a result of some of the speeches of this afternoon, he may even yet consider Amendments which would make this Measure more workable. Is it realised that this Measure is, for example, a departure from the recommendations of the Cadman Committee? My right hon. Friend called attention to the recommendations of that committee. I respectfully suggest that he selected the minor recommendations and ignored the major recommendations, and that in the Bill we are radically and fundamentally departing from the recommendations of that committee which reported so recently. Its report was published in March, 1938. It was a committee for which the country had the highest regard. I will briefly remind the House of some of its recommendations. On Page 32 of the report the committee say:
British external air transport should be concentrated in a small number of well-founded and substantial organisations.
The same external route should not be operated by more than one British company, so as to avoid indiscriminate competition.
Imperial Airways should concern themselves primarily with the development of the Empire air services and certain other long distance air services ….
British Airways …. should develop the other services in Europe. …
For the Government to depart from these well-founded, carefully considered, and universally accepted decisions of the Cadman Committee there must have been some very powerful forces at work, and I always like to know, when policy is reversed, who has been busy reversing it. I think that in this case three forces have been at work. First, there has been the Treasury, and I think the Treasury's part is intelligible, because it has seen substantial subsidies being given and increasing dividends being paid, and I can understand that any Chancellor of the Exchequer would say, "This is not a system which can be allowed to continue," but I do not think that this Bill is necessarily the answer to that protest. Secondly, there was the position of the management of Imperial Airways. For many years they had a monopoly. Recently, and, I think it is fair to say, largely under the pressure of this House,

the Government subsidised British Airways. British Airways brought to bear, whatever one may like to say about it, another method of operating British air transport, and that method was succeeding and continuing to succeed. We can understand that a large corporation such as Imperial Airways or this new corporation would be a good deal happier if this young upstart with new ideas could be eliminated from the picture. Therefore, I fancy that it has met the case of Imperial Airways much better to see British Airways incorporated in that organisation than to see it a separate affair.
Thirdly, there is the action, as I think, of the civil aviation section of the Air Ministry. That section has, in this House and in the country, for several years now during the terrible times for British civil aviation through which we have been passing, been threatened with losing the control of British civil aviation. I believe that it saw that it was essential to have a large buffer organisation, so that as far as possible Parliament and the country would not vent themselves so much upon the Air Ministry as the organisation responsible for running British civil air transport. I believe that those forces have brought about this volte-face since the Cadman Committee reported and had its recommendations accepted. Therefore, while I accept the Treasury contention, I feel, on the other hand, that the views of Imperial Airways and the civil aviation department of the Air Ministry are much too considerably in the nature of self-preservation to warrant very much consideration at our hands. As I shall briefly show, I think the point of view of the Treasury can be met in another way.
With what ruthless thoroughness this Bill sweeps aside all that is being attempted throughout the world by British air transport. If one thinks of this organisation, with so much leeway to make up in the air lines that it is now operating, with so much investigation, trial, and research to do on new routes that we ought to be operating, setting itself up to compete with all the air lines of the world, Government operated, Government supported, and those, as in America, which thrive on local competition, it seems to me that we are going to continue to place British civil aviation in the second-rate position


in which it exists to-day for many years to come. I feel that one should also note that the operation of internal air lines is by no means excepted from the activities of the corporation. I admit that the corporation has to obtain the authority of the Secretary of State for Air before that can be done, but the fact remains that we are endeavouring to build up a series of internal air lines in this country by private enterprise, and if there is one thing that you should not do if you are interested in seeing your internal civil aviation thrive, it is to hold this sword of Damocles over the companies which are at present operating these services. I sincerely hope that my right hon. Friend the Secretary of State, when he comes to review all that has been said in this Debate, will consider completely eliminating that possibility from the Measure.
I said that I would indicate how I thought some of the worst objections to the Bill could be removed. I think it would be better, if possible, to have two separate corporations, and, in the same way as we have many shipping lines subsidised, as has been previously said, there is no difficulty in that at all. We should then have proper comparative competition, not along the same routes in the same way as we have shipping competition, but along parallel routes, which would indicate to this House and to the country what ought to be achieved in the present state of the art and with the facilities available. But if that should not be possible, it seems to me that the Measure could be so amended that with central financial control there could be two completely separate operating units. If that were done, I believe it would go a long way to meet the objections that many have to this Measure.
It is essential to retain a measure of competition in British overseas civil air transport, if we are to have the right type of air lines. May I remind the House that the American Douglas machines and the American Lockheed machines have come into being through the keen competition of the American air lines, and much as I appreciate the sterling technical qualities of many men in the Air Ministry and in the British aircraft industry, I do not believe that for many years they would be able to develop a specification of machines of this type as would result if we had keen competition between the operating

companies, each striving to get the best type of air liner. As I believe also that as rearmament closes down it is imperative that we should build up a strong civil aircraft manufacturing industry, so I believe that we must start as soon as possible to develop prestige for our civil aircraft, so that buyer countries, instead of going to America for civil aircraft, may equally come to this country. I do sincerely hope, therefore, that some of the worst fears that many of us have about the Measure as it stands may be mitigated by some radical changes which I feel that even yet my right hon. Friend the Secretary of State can usefully make in it.

8.35 p.m.

Wing-Commander Wright: Most of the points which I was going to raise have already been very well put during this Debate, but there are still one or two things to which I should like to refer. The hon. Member for Duddeston (Mr. Simmonds) said the Bill was wrong because we were forming one powerful corporation instead of two or three less powerful corporations to fight, with Government assistance, against foreign competition. The hon. Member for Chesterfield (Mr. Benson), in an attack upon Imperial Airways, spoke of the very large subsidies which they had received from the Government, but if my hon. and gallant Friend the Under-Secretary would state what subsidies have been paid to the foreign lines with which Imperial Airways have had to compete, I think we should find that it has not been a case of the failure of private enterprise to compete with private enterprise, but, perhaps, a failure of private enterprise, with only a small subsidy to compete with very powerful Government-owned foreign corporations subsidised to almost any extent. The hon. Member for Walsall (Sir G. Schuster) went into a long explanation to show how wise the Government had been in buying these companies on a valuation of their assets rather than the market price of their shares. Anyone who is connected with industry and has had any experience of amalgamations knows that no one would be so foolish as to amalgamate businesses or to purchase a business on the market price of the shares; but, as the hon. Member for Walsall said, this point having been brought out, it may give a wrong impression outside this House, and therefore it is as well that we should under-


stand how the market price of shares really does arise.
Of course, when things are booming it arises purely from the law of supply and demand. There are more people wanting to buy shares than people who are willing to sell them, and naturally there is an inflated price for the shares, but in depressed times such as the Stock Exchange has experienced for the last 12 or 18 months you get an entirely different picture. My hon. Friend referred to certain gentlemen who call themselves jobbers. Perhaps it is not generally understood that their business in life is to accept shares which are offered to them for sale. Within ordinary reasonable limits they have to accept those shares, and therefore when there is no great demand for shares the jobbers fix prices very low. They fix two prices, one at which they are prepared to sell and one at which they have got to buy. In that way one gets an entirely incorrect picture of the true value of shares. Anyone going into the market as a big buyer will find that almost immediately the prices which he has seen recorded as the jobbers prices have entirely changed. They immediately raise them, and the buyer has to pay a good deal more for the shares. One has known many instances of people who, seeing the shares of their own or some other company standing at a very low price, have gone into the market with the idea of buying a very large block of them, but with the result that almost within a few hours the shares have perhaps doubled or trebled in value. That is exactly what would have happened had the Government been so foolish as to go into the open market and endeavour to buy the shares of these companies.
Several speakers have referred to the complaints which are being made by the owners of internal air lines. There are two points which they do not like. One is that the Secretary of State is retaining the right to allow this corporation to run internal air services, and the other is the fact that he seems to be giving away what they believed was his right to increase the £100,000 worth of subsidy should he consider it to be necessary to do so. With regard to the first point, I do not suppose that my hon. and gallant Friend the Under-Secretary will have any difficulty in satisfying these internal operators, because obviously the Secretary of State

for Air is not going to compete with one subsidised company working against another subsidised company; and in any case they are protected by the licensing board which has recently been set up. But I do think the Secretary of State should have the right to give this corporation the power to run internal services, because should any of the present companies fail to carry out their work efficiently or go out of business this might be the obvious way of filling the gap. In any case, surely the time is coming when people from the large provincial centres will not be content to have to come first to London in order to travel overseas by air. In fact it will be a physical impossibility for them to do so. Already in bad weather Heston and Croydon become dangerously overcrowded, and if and when civil aviation really assumes large proportions it will be ridiculous for people starting from the Birmingham airport to have to change at a similar airport in London before they can proceed overseas.
There is one point I should like to raise about the personnel of the suggested Civil Aviation Development Committee. It is to be composed of a chairman, a representative of the Society of British Aircraft Constructors, of the Air Registration Board and of the corporation. I would suggest that a representative of the Aerodrome Owners' Association should be included. On page 7 of the report the first reason given for the unfortunate fact that civil aviation has not developed faster in this country —and, of course, it is the main reason of the whole lot —is the absence of better ground organisation. In this country our policy with regard to ground organisation and the provision of airports has all along been entirely wrong. We have heard a great deal about the devolpment of American aeroplanes. It is not that America has had more experience of building aeroplanes, but in America they have specialised in ground organisation. Even with the finest aeroplanes in the world one cannot carry out civilian services to schedule in all weathers and day and night unless there is proper ground organisation. It is the basis of the whole industry. In this country we have worked on entirely the wrong lines. The civil side of the Air Ministry has always been at fault in this matter. They have given a great deal of advice to towns all over the coun-

try in trying to get them to set up airports, but those airports have been developed principally with the idea of encouraging private-ownership flying and club flying, and always with the idea of creating a reserve for the Royal Air Force. We have suffered through all this development being under the control of the military side of the Air Ministry. As an hon. Member has already stated, we should have got ahead faster if civil aviation had been separated from the military side.
Now we have the committee, I hope they will consider not only the design of aircraft, but also the design of the aerodrome and will get this very vexed matter settled once and for all. We cannot go on year after year, saying that aerodromes have to be extended until they run half way round the town. I suggest that the time has come for the aircraft industry to be told that they have to produce aeroplanes that will land on the aerodromes, and that the aerodrome owner need not be told to build a still larger type of airport in order that the latest aeroplane may land there. It is high time that this problem was tackled, and that is why I should like to see a representative of the Aerodrome Owners' Association on this very valuable committee.
There are two problems in connection with the development of civil aviation and only one has been tackled in the past. First, there is the problem of the faster passenger service. In this country we have not had a very fast passenger service. That is what we have been trying to get. Equally important and perhaps more important by comparison is that of the slow freight service. The idea that you can build up a good freight service by using worn-out passenger machines, when they become very expensive to operate and are obviously not of the right design, is fallacious. A good deal of useful work can be done by the Committee if they will turn their attention to a really suitable, well-designed freight machine, which will be able to carry freights at reasonable rates and give a service that -we can trust. When this Bill is through I hope that what will receive the first consideration of the Secretary of State for Air will be the provision of satisfactory services. We have always heard a tre-

mendous amount about the provision of satisfactory aircraft which is, of course, of vital importance, but the aircraft industry is pretty fully employed at the moment, and one can say that, with the best will in the world, it will be some years before the industry can produce aircraft which will enable the new corporation to compete satisfactorily with some of the foreign corporations.
I hope that the Secretary of State will be willing to use the power that I see he has retained for himself to get these services started, if necessary by buying the finest type of foreign machines. It is the service that matters and not the machine that is flying. Once you get the service started you will create a demand for the machines, and by that time perhaps our manufacturers will be in a position to supply them. I hope that the Secretary of State will be very careful in choosing the personnel for this new corporation. One of my hon. Friends put it well when he said he hoped that the corporation would not become merely a refuge for retired Governors. If the right hon. Gentleman will get keen young people who understand both business and flying, the corporation will be a very great success.

8.50 p.m.

Mr. Perkins: It is not often that I find myself in agreement with the Air Ministry, but I am in agreement with them tonight. I propose to vote for this Measure, and I shall do so for three distinct reasons. The situation in civil aviation is so bad that any change is better than no change. Secondly, I am supporting the Bill because I realise that the competition which we shall have to face in the future will come almost entirely from Government-controlled or partially Government-controlled air lines. Thirdly, I support the Bill because we ought to give Sir John Reith and Mr. Runciman a fair chance. Hon. Members know that a year ago, when Sir John Reith took over Imperial Airways, it was a very unhappy family. Since then there has been a complete change in the atmosphere of that company. The staff are now being treated as human beings, and the result is that there is a new spirit and the staff are all out to put up a good show. It is up to this House to give them every encouragement.
Nevertheless there are several matters which this House might consider in Com-


mittee and which would improve this Measure. There is this very thorny question of the price of the shares. It seems absolutely monstrous that one company, which has been controlled in the past by an incompetent board of directors, un-progressive, lacking in imagination and initiative, a company which has been receiving large subsidies, far larger subsidies than this House realises, because many of them have been concealed subsidies, and when out of those subsidies the company has paid dividends as high as 9 per cent; when it has equipped its services with obsolete machines and obsolete equipment and has succeeded in bringing British prestige in Europe down to zero, such a company is to get 32s. 6d. The other company has had a live board of directors, progressive, full of initiative, full of imagination, receiving little or no subsidies until the last two years, equipping its fleet with modern machines and equipment, and it has succeeded in upholding British prestige in Europe. It is to get only 15s. 9d. Surely it is obvious to anyone that such a differentiation is unfair and indefensible. The right hon. Gentleman is always reasonable in these matters, and when we reach the Committee stage I am sure that he will be only too delighted to accept Amendments to secure that there shall be a fairer distribution of the swag.
Now there is the question of competition. It is often maintained that it is important to have two companies more or less in competition in order that we may have some kind of yardstick by which to measure their relative efficiency, but it seems to me that we have too much competition now in aviation. The way for me to prove that contention is to read particulars of some of the air lines so that we can see the competition that we are up against. First of all, I will take Europe. You can divide Europe into two services. The services by British Airways are run extraordinarily efficiently, with modem American machines. Their pilots are earning a very high reputation for this country, and they are rapidly beginning to recover lost ground in Europe. There is also the London-to-Paris service. Any hon. Member who has been on that service during the last six months will agree with me that it is far from right. I do not believe we shall ever get that service right as long as we use those old museum

pieces, the "Scylla," and those flying octopuses, the "Hannibal," on that route. As long as they are in day-today operation I do not believe that we shall make much headway on that route. It makes my blood boil when I go abroad and, picking up Air France literature, I find that no less a person than the Chief of the Air Staff sends his family, when they go to Paris, by a French air line in preference to a British air line —a fact which is naturally used by Air France in their literature. It must be obvious to anyone that the competition in Europe is now acute, and that in the future it will become more acute.
Next there is the run to India and Australia. Anyone who has gone into the facts will, I am sure, bear me out when I say that we do not compare well with the. K.L.M., the Dutch air line. They have beaten us on printed schedules, and we have failed to maintain our printed schedule. I remember that three months ago I asked a question of the Secretary of State, and he answered that more than 50 per cent. of the British services through to Singapore were late; they are up against the Dutch, the French, and are beginning to be up against the Germans, because they are now going to Baghdad. Obviously, there is going to be keen competition on this run in the future. Then there is the South Atlantic run. The Germans started in 1934, the French in 1935, and the Italians are now starting in 1939. They are running a weekly service. The Germans are going to double their services this year, and I understand that the French are to do the same next year, but, although we have had repeated promises from the Air Ministry for an early start we were told the other day by the Secretary of State that he hoped to start this service somewhere in 1943 —nine years after the Germans, and eight years after the French. It must be obvious to everyone that by the time we get going on the South Atlantic route there will be very acute competition there.
As regards the North Atlantic, in spite of repeated promises which have been made in this House, the Americans have got away with it and have started first, and we all know that in the next five or 10 years there is not only going to be American competition, but German, French, Dutch, Belgian and Italian. Then there is the Pacific. The Americans


have been crossing the Pacific for nearly three years, but we have not even started to talk about it, and everyone knows that when the Air Ministry starts talking about a thing nothing happens for at least 10 years. As far as I can see, there is no possibility of our crossing the Pacific until 1948 or 1950. Then there is the African run, and I must say that in that particular case we excel. We have built up a very fine reputation down to the Cape; our services are second to none, for the simple reason that there are no others, and there is no competition whatever. Finally, there is the West Indies. In spite of the fact that a scheme was put up to the Air Ministry in 1920, 19 years ago, for running services between the islands, we have not yet started, but the Dutch are running our services for us between the islands. Last year they carried 9,813 passengers. If you look at our services, you can only come to one conclusion, that wherever we are up against competition we are being defeated all along the line, except for the British Airways services in Europe. As far as I can see, there is too much competition now, and there is certainly going to be too much in the future.
Then there is the question of the management of this new corporation. I understand that the Secretary of State is going to have the power to nominate a committee of 15. It is obvious that the Prime Minister must find himself in rather a difficult position. I hear rumours that there are many members of the Cabinet who are anxious to become directors of the Suez Canal, but unfortunately there are not enough directorships going, so that the poor Prime Ministerfinds himself in rather a difficult position. But the Secretary of State has come forward, as he always does, and saved the Prime Minister from a difficult and embarrassing situation by creating no fewer than 15 more directorships. He has not disclosed what the salary is to be, but no doubt it will be in the neighbourhood of £5,000 a year. I want to ask my right hon. Friend in all seriousness: Are these new directorships going to be used in the future for pensioning off tired and broken-down CabinetMinisters? Of course, we have a precedent. There was a Chief Whip who became First Lord of the Admiralty, and when he left office, became the Government nominee on the board of British Airways. I have a kind of sneaking feel-

ing that, although possibly now it is not the intention of the Secretary of State to fill this board with worn-out Ministers or governors, in the future there will be a tendency to do that. I suggest to my right hon. Friend that, when we reach the Committee stage, he might perhaps accept reasoned Amendments which would not only exclude Members of Parliament, but would also exclude all peers, and all ex-Cabinet Ministers, and should insist that no one should be on the board unless they were in possession of a current A licence, and therefore had some knowledge of aviation, and that no one should be a member of the board for more than five years.
The next subject to which I want to refer is that of the whole subsidy for civil aviation. I remember that, only four or five years ago, the Air Navigation Act laid it down that it was not allowed to have more than £500,000. Three years ago the figure was increased to £1,500,000, and, after the Cadman Report, it went up to £3,000,000. Now, my right hon. Friend is asking for £4,000,000. That is a very large sum of money, but in actual fact it is only about 2 per cent. of our total Air Ministry Vote, because this year we are spending £200,000,000 on the Air Force. In the future, possibly in a year, or in two or three years' time, there will be a measure of disarmament in the world, and, when that comes, our shadow factories will become shadow factories in fact; our municipal airports will find those volunteer reserve squadrons gone, and will once again become stagnant; the new housing estates which have been built to house the workers in shadow factories will become empty, and some of the most flourishing areas in this country will suddenly, in a night, become the most distressed. What is the solution of that problem? There is no solution; but it should be possible, by developing civil aviation now., at any rate to relieve it. Unfortunately, however, the Secretary of State is now asking for an upper limit of £4,000,000. I myself wish he had asked for £40,000,000, not to spend now, but in order that he may have the power up his sleeve, so that in the future, should we find ourselves up again rising unemployment, he would at any rate be able to go ahead and develop civil aviation. I believe that in the next three or four years some Secretary of State for Air and some future


Minister of Labour will bitterly regret that my right hon. Friend put that figure of £4,000,000 in this Bill.
Then there is the position with regard to this Bill and this House. As the House knows, it is quite impossible for any Member to raise a question about the B.B.C., because, if we try to raise questions about the B.B.C., we are met with the answer that there is no Minister responsible, and that, therefore, the matter cannot be raised. I want to ask the Secretary of State to what exten he will accept responsibility for the actions of this Board. Will it be possible for the House to discuss it every year on the Air Estimates? Will it be possible for the House to heckle the Secretary of State day by day by question and answer at Question Time? Or is this new organisation to be a watertight compartment free from all criticism? Is Sir John Reith to be set up as a little tin god free from any possible criticism except that once a year he will be subject to some mild criticism, probably in the early hours of the morning? I would suggest to my right hon. Friend that there is one solution of that problem, and that is to make him an ex-officio member of this board. He never need turn up, but he will then have to assume full responsibility for it, and, therefore, will have to answer for the board in this House. I am going to move an Amendment to that effect when we reach the Committee stage.
I should also like to ask the Secretary of State whether we are going to have a change of outlook in this new corporation. I know that the Under-Secretary has been to many air displays on the Continent. So have I, and I am sure he will bear me out when I say that, whenever a new aerodrome has been opened on the Continent, or whenever there is a large air display, the local national air line is always there. Ten days ago a new airport for Scotland, half way between Edinburgh and Glasgow, was opened. All the main internal air lines were there. The Dutch sent a machine, the Belgians, Swedes and French were all there; but Imperial Airways were not there. They sent neither a machine nor a representative. Can the Secretary of State give an assurance that that will not happen again; that when there is a great national airport being opened in this country either Imperial Airways or this new corporation will back it up?

Then there is the question of the very near future of civil aviation at home. At the moment, I believe the greatest enemy civil aviation has got is the railway companies in this country. The House will remember how those companies did everything they could, with the railway booking ban, to drive people to the railways, and prevent them from flying. When the House decided thatthat must stop, they changed their tactics. They adopted a much cleverer course of trying to buy up all the internal air lines and slowly strangling them. I have here the timetable of railway air services to Glasgow. There are two services a day. I imagine that the more convenient is in the afternoon. This leaves Victoria at 2.45, and, after three stops, arrives in Glasgow at 8.30. That is practically six hours traveling —roughly the same time as a train. Those are the internal air lines run by the London Midland and Scottish Railway. The railways are out, by any method, fair or foul, to strangle aviation in this country. I believe that in the future they are going to find allies in the cable companies, the shipping companies and the shipbuilding companies.
I do not suppose many hon. Members have had the opportunity or the time to read a report by the United States Maritime Committee on the question of big ships and flying boats. This report shows that six flying boats will be capable six years henceof carrying over the North Atlantic in one year as many people as the "Queen Mary" can in one year. They would maintain a weekly service; the comfort they would provide is about the same as a Pullman car, and the fare equal to, or slightly less than, that of the super-liner. This is what is going to happen in the future on the North Atlantic. When it comes, it is going to be a bitter pill for the cable and liner companies. If we are to fight all these companies we must have some such form of corporation asthis to do it with. It is because I believe that small companies are bound to fall by the wayside in this fight that I am supporting this Bill.

9.9 p.m.

Colonel Ropner: On more than one previous occasion I have attempted to defend Imperial Airways from onslaughts such as that which we have just heard from my hon. Friend the Member for Stroud (Mr. Perkins). When allegations


of inefficiency are made against this company, it is only fair to point out that the subsidy it has received has been on a far lower scale than that received by its Continental competitors, to many of which the hon. Member referred. I have always thought, and still think, that Imperial Airways —and, for that matter, British Airways, too —are companies of which this country has no cause to be ashamed. I have complete confidence that the new corporation will take all that is best from both concerns, and will worthily represent this country on the Imperial, Continental and trans-oceanic routes which it will serve. I have made those preliminary remarks because, I suggest, on this occasion the House should be not less interested in our internal air services than in the more spectacular overseas airways.
It is to give expression to certain fears harboured by inland air-operating companies that I trespass on the time of the House. Under the Air Navigation Act, 1936, and the Air Navigation (Financial Provisions) Act, 1938, internal air routes became subject to a licensing authority, and in that respect the interests of the travelling public were safeguarded. At the same time, internal air lines were given a measure of security, since the overseas operating companies, which are very heavily subsidised, were prohibited from competing with internal air lines on internal routes. If Clause 2, Sub-section (2, a) Clause (4, a) and Clause (6, b) of this Bill are considered together, it will be seen that this new corporation may apply for and the Secretary of State may grant permission to operate on internal routes in competition with companies which could not live for more than a few weeks if faced with an attack by this monster corporation. I sincerely hope that the Minister will amend the Bill so that the new corporation shall be prohibited from encroaching on internal air lines. I hope that he will give that measure of encouragement to the internal air line companies, which, in the face of very great difficulties, are in many instances making a success of their venture.
In two other respects this Bill, if it became an Act without amendment, might hinder the development of internal air routes. As the law stands, the Secretary of State may use his discretion to

increase the amount of subsidy for internal lines out of the common pool of —3,000,000, and whatever subsidy is received by internal air lines is guaranteed until 1953. This Bill not only limits to —100,000 per annum the subsidy which the Secretary of State can pay internal air lines, but it also shortens by no less than 10 years the time for which the subsidy is granted by Statute. I would like the Under-Secretary to give me an assurance, if he can, that his chief will be willing to retain power to increase the subsidy over the —100,000 if he thinks it necessary, and will be prepared to leave the terminal date of the subsidy period at 1953. I suggest that no one, not even the Secretary of State or the Under-Secretary, can say now what will be the relative importance of external and internal air lines in five years' time let alone 10 years hence. I have every confidence that the Secretary of State, with the discretion that I suggest he should retain, would use that discretion properly. As I have said, the internal air lines are having a very hard time. Distances are short and climatic conditions are extremely varied, and if the Minister can do what I ask it will bring renewed confidence to companies which require that confidence when looking into the somewhat murky and difficult future.

9.16 p.m.

Sir Robert Bird: I desire, first of all, to support my hon. and gallant Friend the Member for Barkston Ash (Colonel Ropner) in the measure of justice for which he asked in regard to Imperial Airways. I think that that body has been criticised in far too hard terms in this House over and over again, and that not enough consideration has been given to its very great achievements. I can speak of those achievements out of my own experience, because I have flown to the Continent many times upon the machines of the Imperial Airways since its inception, and indeed right from the inception of a series of predecessors of the Imperial Airways when commercial flying to the Continent was founded shortly after the War. I do not think that the hon. Member for Stroud (Mr. Perkins) has been, perhaps, quite just in his criticism of the machines of Imperial Airways. He said that anyone who has flown in the last six months has had still to fly in a machine of an old type, but it is a type which, I think, he will be the first to acknowledge, when


introduced, proved to be not only one of the most successful aeroplanes ever designed, but also, as the record of its service shows, one of the very safest. Evidently he has not been to Paris lately because these machines, reliable and slow as they may have been, have now been replaced by two machines of a modern type, one type being equal in safety to the type which is flown by the French company, and the other type being even faster. They are in every way modern machines of which we in this country can be proud.
Those of us who have had much anxiety for the future of civil aviation awaited this Bill with eagerness in the hope that it would strike off the shackles which have fettered the development of civil aviation for so long in this country and give to it that imagination and freedom of development, and the use of the great wealth of technique that we have here, and place us in the matter of civil aviation not only equal to the best that is done in other countries, but, as nearly always happens with our British enterprises given sufficient time and opportunity, well ahead. I and a good many of my friends are very disappointed with this Bill. I do not speak of the financial side of it, as that has already been dealt with very adequately in the Debate, but we feel that on the operational side there is a lack of inspiration in the conception of the provisions of the Bill. I earnestly appeal to my right hon. Friend the Secretary of State for Air to breathe into this Bill as it passes through the various stages something of that enthusiasm, inspiration and imagination which we know he possesses.
One feature of the Bill which leaves so much to be desired is the enormous board of some 15 directors. I say so myself, "When these directors meet round the table for their board meetings, what are they to do, and what are they to say to each other?" They are fettered and shackled to such a degree that they cannot even be called "Yes men," because they will have nothing put to them upon which to give answers. This corporation, when it is formed and when at last it leaves its nest, will have its wings so pinioned that it will not only not be able to fly, but it will be able to do little more than flutter. Invitations are to be given to gentlemen in the Empire to take seats on the board —I understand that

two seats, or perhaps three, are to be reserved for representatives of the Empire —and I feel that, when they realise how limited the contributions which they can make really are, they will feel that there is no compliment at all in the invitation.
Another example of the lack of inspiration is to be found in the very designation of the corporation. We have a cumbersome title and one which is, perhaps, a commonplace, and the sort of title you find on some prospectus which is offered to the public for some ordinary commercial development. I feel, as I believe do many Members in this House, that we ought to have a title worthy of the prestige of the British Empire and of what we hope that this great corporation will become. We want a title that is descriptive, and, above all, one which is not cumbersome. Mention has been made in the course of the Debate of the titles of the semi-government lines who compete with Imperial Airways on the Continental routes. The Air France, Luft-Hansa, S.A.B.E.N.A., K.L.M., and Al Littoria, all are titles which are descriptive and dignified and have prestige. I beg of the Minister to apply his own ingenious mind to this very important point. I hesitate to make a suggestion myself. All of us who were born in the Victorian era must have learnt at our mother's knees that "Britannia Rules the Waves." If that be true I think we can say to-day that Britannia subdues the winds. When those of us who were present at the opening of the great Birmingham Airport on Saturday, in the midst of the most terrible stormy weather, saw the display of some of our latest machines, we could really say to ourselves it is true that Britannia subdues the wind. I hesitate to make a suggestion to the Minister, but I think the name "Britannic Air" would be an apt one for this new enterprise.

9.26 p.m.

Mr. Montague: There is a long-standing prejudice against looking a gift-horse in the mouth, but if that horse is likely to become embarrassment to the subsequent owner it might be worth while to examine its teeth. A very bright and joyous speech was made by the hon. Member for North Paddington (Mr. Bracken), who said that this Measure was neither fish, flesh nor fowl —although I gathered he thought it pretty foul. I suppose it was good enough to serve as a red herring for


the Labour party. We on this side do not oppose the Measure in its general principles. We are in favour of the development of social service in the air, or any other kind of social services which are part of the preliminary structure of socialism, and to that extent we certainly do welcome the Measure. But the most remarkable fact about the Measure, and about the speeches that have been made by those responsible, including the Secretary of State himself, is the conversion of the Government that has taken place, even within one short year.
I remember the Debate upon the Air Navigation Bill of last year, and the onslaughts that were made on the principle of collectivisation. The hon. and gallant Member for Accrington (Major Procter), for instance, thundered out the message to this House that we should not have Socialism at any price. The hon. and gallant Member for Wallasey (Colonel Moore-Brabazon) also made a speech last year; it was the same speech that he made this evening. He welcomed the Bill because of its necessity, but he had something to say about the bureaucratic features which it contained. Last year the Under-Secretary said:
As regards the form of private enterprise, Imperial Airways and British Airways are controlled, but any losses fall upon those who have been bold enough to venture into this new and developing field of transport, in the hope of some return in the future, which return, if it does come, will be limited by Statutes passed by this House. …Actually the policy of the Government has been to temper the strength of monopoly by a reasonable measure of competition wherever there appears to be a sufficiency of traffic, and in the last two years that policy has been implemented by the selection of a second chosen instrument "—
I like that theological expression —
namely British Airways, to work alongside and to some extent in competition with Imperial Airways.
The Under-Secretary will not make the same speech as he did last year, because the Government have come to the conclusion and the Secretary of State has said in practical effect, that the competition upon which the Under-Secretary relied, and which was so much the burden of speeches made during the course of that Debate, has been found to be useless and entirely undesirable in the development of at least oversea services.
I have listened to the Debate pretty closely this evening and I have heard the same abstract generalisations about this competition, which is supposed to be so necessary for the development of air services as of other services. I do not think that abstract generalisations really meet the case. No Socialist would contend that it is impossible to find instances of public enterprises which have been unsuccessful, which have represented the element of bureaucracy, but what a Socialist would say is that the record of public enterprise in the whole world in modern times is at least as good as the record of private enterprise. I suppose the hon. and gallant Member would say that the difference lies in the fact that in the case of private enterprise the losses are borne by private individuals. Do not make any mistake about that. Losses may be borne by private individuals, but they are borne by the whole of the industrial community and the common people of the country. The first people who feel the effects of failure in private industry are those employed in the business concerned, and no one would surely say that in the structure of capitalism allowance is not made for the inevitable margin of failures and the lack of success. The loss is passed on to the public if it is a failure, and if it is a success, well, the public are necessarily exploited.
But really it amazes me to hear arguments of that character about the value of competition and private enterprise when the same hon. Members criticise the majority of Imperial Airways —and I have had a good deal to say in criticism of Imperial Airways. The hon. Member for Stroud (Mr. Perkins), for instance, said that a director of Imperial Airways preferred to travel on a machine run by Air France. That may be a reflection on the management of Imperial Airways, but it is also a commendation of a concern which is much more a State monopoly than even this new corporation, and a State monopoly which includes internal air services, whereas this particular Measure does not at the moment propose to include them. I think that each case ought to be considered on its merits, and the point is that the Government themselves have come to the conclusion that a form of public corporation, this so-called monopoly —it is a monopoly but a public one, which makes all the difference —is


necessary as a part of the industrial and operational development of the air services of this country. That is the case as the Socialist puts it. It is not a question whether this, that or the other experience is a failure or a success. After all, a social service must be a success if it performs the social service intended and if it is conducted upon principles of efficiency.
You can no more judge the success of any kind of public corporation or social service by the lines of a commercial return, a balance sheet, any more than you can judge the value of companies, as hon. Members have said this evening, by the actual price of shares upon the Stock Exchange. I believe that when some hon. Members get to Heaven, the first question they will ask will be: "What was the last dividend?" I am perfectly sure that the question of the value of service is the service that is given. Even if it is given with subsidies, on the one hand, or what would amount to the same thing, by the expanding of the service upon non-profitable lines, non-economic lines, whichever it is, if it is a necessary service and efficiency is applied to it, then the case is made out for that service under public enterprise.
The question really turns on the way in which the matter is handled. The hon. and gallant Member for Hertford (Sir M. Sueter) would be the first to see that the finest example of efficiency is to be found in the running of a modern battleship, and I suppose he would go on to say that if I gave him discipline he would give me efficiency. I say that if you give me patriotism and a sense of service and loyalty to the State, I will give you efficiency. The hon. and gallant Member gave the answer himself to the broad general arguments against public developments when he said that for this corporation you must find men of great vision, and live wires, I see no reason at all why the great vision and the live wires should not be found, although I hardly expect this Government to find them. It is perfectly correct to say that if you want a principle carried out, let those who believe in the principle thoroughly and earnestly be put into the position to carry it out.
This Bill is necessary. I have no tremendous hopes for it, but it is part and parcel of that inevitable transitional de-

velopment towards full public service in which the Labour party believes. But let us look at the Bill. The principle of preserving the interests of the friends of the Tory party is always to be found in Measures of this character, whether it is a matter of agricultural organisation, subsidies or what not. Apart from the financial provisions, which have been adequately dealt with, in Clauses 3 and 4 there is set out what the corporation can do and what it cannot do. For instance, the corporation shall not use
aircraft designed or manufactured outside His Majesty's Dominions 
except with the approval of the Secretary of State. They shall not operate
any flight on charter terms within the United Kingdom 
except with the approval of the Secretary of State. They shall not
manufacture parts of aircraft or aircraft equipment or accessories,
except with the approval of the Secretary of State. Clause 5 says that:
The corporation shall not manufacture aircraft.
Nothing is said there about the discretion of the Secretary of State. Why? Because the other things, the manufacture of parts of aircraft or aircraft equipment or accessories is different from the manufacture of complete aeroplanes. These things may be required in exceptional circumstances and the Minister is allowed discretion in regard to them, but the Bill says that the corporation shall not manufacture aircraft. I suppose that is not a question of efficiency, because the corporation is allowed, with the consent of the Secretary of State, to do a large number of things other than those enumerated in the major part of the Bill. Why are they not to manufacture aircraft? I suppose it is because the manufacture of aircraft is a pretty profitable enterprise.
In our Amendment we should like the principle of the public corporation, public utility, applied to the whole aircraft industry in this country, but I do not say that we expect to get that from this Government. Whether it be a matter of manufacturing aircraft, which I admit goes rather a long way, or a matter of internal air lines, the principle is the same. Why are the internal air lines left out of this merger, except in so far as certain things may be done with the consent of the Secretary of State? Is this


not an absurdity? A man can get into an aeroplane in Manchester in order to go to the other end of the Empire line, to connect up at Heston or Croydon for the Imperial machine, or a number of people may go for a similar purpose, but if one person stops in London, the thing is entirely out of order and in opposition to the terms of this Measure.
Why should not the internal air lines be brought into the same merger? Or the suggestion of the hon. Member opposite might be considered, namely, to combine the internal air lines in another merger, which should not run competitively with this corporation, but should run for the particular purposes of the internal air services. That would be a compromise worth considering. Are these fiddling little concerns, many of them private air lines run by railway companies, to go on keeping back the proper development of civil aviation in this country? If so, why? I suggest that it is because it is regarded as much more important to look after the interests of those people where there is no competition from the socialised services abroad.
I should like to say a few words on a matter which has been brought up on several occasions. I hope the Undersecretary in his reply will give us complete assurance about the relations of the new corporation and its employés. The House will remember that I had occasion to make a number of complaints about trade union recognition in respect of Imperial Airways. The report of Sir John Reith about the business was more or less satisfactory to the Government, and I accepted it; I understood the circumstances.
At the same time it will be admitted that what has been said in criticism of Imperial Airways has had a salutary effect and that there has been an improvement in the relations between the company and its employés. I hope that the principle will be carried on into the new corporation, and I should like the Undersecretary to assure us quite explicitly that there will be no interference with the principle of trade unionism, that the new corporation will enter into all those conversations which are necessary in the relations between those employed and their employers, and that this new policy will apply not only to

pilots but to every section of those who are employed. The ground staff, the refreshment staff, everybody concerned, ought to come into relations with the corporation upon a basis of trade unionism fully and frankly realised just as it is in the large industries, where the principle has been of singularly valuable service in the development of industry. Hon. Members as well as myself have had a document, I believe, from a Captain Primrose, who apparently has been nipped in the bud. I do not know who Captain Primrose is, but in this document he makes an interesting suggestion that the Secretary of State for Air has had this forced on him by the Treasury against his better judgment, that the Treasury have been alarmed at the prospect of admitting the precedent of more than one chosen instrument, with the implication that the right to a subsidy may be claimed by every private enterprise establishing themselves as going to provide overseas facilities. The Cadman Committee in their report said it was in the interests of progress that there should be competition with Imperial Airways by another British company. That has been thrown overboard, and I can only wish that the principle had been carried to its logical conclusion and that this was a Measure which had the full and hearty support of the party I represent, instead of the rather half-hearted support we give it and which I am expressing this evening.

9.49 p.m.

The Under-Secretary of State for Air (Captain Harold Balfour): I do not think there can be any complaint in any quarter of the House as to the Debate on this Bill. It has been most helpful, interesting and to a very considerable degree constructive. I was pleased to hear the hon. Member for West Islington (Mr. Montague) say in his speech that the Bill is necessary. It seems strange that he should vote for an Amendment to the Second Reading when he tells us, speaking for his party, that the Bill is necessary. The hon. Member also quoted some remarks of a speech which I have made. I was glad to hear the quotation, because it seemed to me to cover many of the points which have been made in criticism of the Measure regarding the fallacy of uncontrolled competition. The hon. Member made part of my speech for me when he supported the Bill, but he seems to think


that I who support the Bill should vote against it, while he should vote against a Bill which he thinks is necessary. It seems to me to be a strange contradiction.

Mr. Montague: I do not intend to oppose the Bill, but we can surely move a reasoned Amendment expressing our point of view.

Captain Balfour: Many of the hon. Member's supporters have condemned the Bill whole-heartedly, although they agree that the Bill is necessary. It seems to me that the main principles of the Bill are not objected to to any great extent in any quarter of the House, with the exception of the hon. Member for Paddington (Mr. Bracken) who whole-heartedly condemned the Measure without putting forward any constructive suggestion in its place. Where the principles of the Bill have been objected to as they were by the hon. Member for Duddcston (Mr. Simmonds) I would say that the considerations which he put forward as grounds for the rejection of the Bill are the considerations to which due weight has been given by the Government, and, indeed, the problems which he has put before the House are the very problems which have led us to the conclusion that the Bill is the best method of advancing the interests of civil aviation at the present time and in the present circumstances.
The method of execution of the principle has been the chief ground of difference in the Debate. Sometimes we have been accused of not going far enough in the direction of a public corporation, and at other times we have been accused of copying, what is not quite clear to me, the policy which the Labour party would like to pursue if they had the opportunity. Many questions as to the method of execution have been raised. I have not the time to answer them all to-night but I am going to endeavour to answer the main criticisms, and I can assure hon. Members that those questions which I am not able to answer to-night will be given due attention. The right hon. Member for Keighley (Mr. Lees-Smith) and also the hon. Member for Stroud (Mr. Perkins) voiced the same misgivings. The hon. Member for Keighley in his speech admitted that the present form of corporation was not denying the right of close questioning and control by Parliament. He said we were getting the worst of both

worlds. It seems to me that if this corporation can fulfil the following requirements the right hon. Gentleman will be satisfied
provided that the general direction and day to day management should be endowed with a strong sense ofinitiative and responsibility, and should therefore, be freed from unnecessary detailed ministerial and Parliamentary supervision once the broad principles of policy have been laid down by Statute.
I do not think any hon. Member can object to that. I would remind him that those are the words of the right hon. Member for South Hackney (Mr. H. Morrison) in connection with the national planning of transport. I think he should settle that little difference of opinion with his right hon. colleague and leave us the credit of doing something which he considers sufficient and which his right hon. Friend also considered adequate.
The second point of the right hon. Member was that the corporation are not allowed to manufacture aircraft. He said that they were to be allowed to manufacture parts, and that after all if they are to be allowed to manufacture parts why not assemble them and manufacture complete aeroplanes? The provision for the permissive manufacture of parts is included on purpose, in order to allow the corporation to carry out repairs and replacements for aircraft which may be stranded in far-away places. It is a very different thing from the design and manufacture of aircraft. The corporation will be living on public money, and therefore, I submit that it should not be free to compete with existing manufacturers. Even if the right hon. Gentleman does not agree with that remark, I think he will agree with this one. The corporation's primary duty is operation with the maximum efficiency. Every organisation has only a limited amount of directional brains and a limited amount of energy, and if in the distant future the time ever does come when the State will manufacture aircraft, I do not believe an operational corporation would be the right instrument for doing that, but rather I believe that their energy should be directed to the main purpose for which the corporation is being set up. [An HON. MEMBER: "Why?"] Because design and manufacture needs an entirely different type of organization, and we are trying to set up an operational organisation to give the maximum efficiency at the minimum expense.
I want now to pass to the next point made by the right hon. Gentleman. He put forward the proposition that when the State acquires an undertaking it should pay no more than would be paid by private purchasers. I accept that. But nor should the State pay less. It should pay a fair and reasonable price, which I maintain is being done in this case. For the reasons given by my right hon. Friend the Secretary of State, we cannot accept the Stock Exchange share market price ruling on the day on which the corporation was announced as being the basis for the value of the organisation we are to acquire. The right hon. Gentleman and various other hon. Members opposite have endeavoured to make that point. But supposing that were accepted, I put this to hon. and right hon. Gentlemen opposite. If they reject the net tangible asset basis for the valuation and ask for the share market prices, then let us go back to 1937, when the shares of this company were quoted at approximately 60s. on the Stock Exchange, although the assets were worth no more than they are to-day, and may even have been worth slightly less. What would hon. Members opposite have said if the Government at that moment had stated that they would set up a corporation and had adopted the principle which hon. Members opposite now ask us to adopt Why, we should then have paid approximately £5,000,000, instead of £2,500,000 for the assets of Imperial Airways.

Mr. Benson: May I point out to the hon. and gallant Gentleman that at that time the number of shares was 600,000 and not 1,600,000.

Captain Balfour: That does not interfere with the principle. The hon. Gentleman will remember that even after the share issue at 30s., the shares went up very considerably for a period of time. I repeat that if we had adopted the Stock Exchange valuation at that particular time, at a figure which was higher than the assets were worth, we should not have heard any hon. Member to-day saying that we ought to have adopted the Stock Exchange share valuation of the particular day. I believe that, in spite of the criticisms that have been made, the net tangible asset basis is the best basis for the purchase of this concern, and indeed, no

other basis has been suggested by any critic to-day as being a practicable one.
I want to clear up completely one point which the right hon. Gentleman the Member for Keighley got a little wrong. It concerns the responsibilities of the Treasury, the Air Ministry and the firm of Sir William McLintock. The answer to the right hon. Gentleman is that the firm of Thomson McLintock, which I think everyone admits is a very fine firm of accountants and which has rendered signal service to the commercial community of this country, were employed to arrive, by means of discussion with the accountants of Imperial Airways, at an objective valuation of the tangible assets. It was with this valuation to go on and Messrs. Thomson McLintock's advice as to the intangible assets, that the Treasury and the Air Ministry were in a position themselves to conduct negotiations. The House would be the first to criticise the Air Ministry and the Treasury had we not gone to expert accountants in order to get advice as to the balance-sheet position of the company we were going to acquire. Thus, it will be seen that the Treasury took the major part in conjunction with the Air Ministry, in conducting these negotiations, and that the firm of Thomson and McLintock did not have any powers delegated to them, bat were only fact-finders and advisers, and that we had full responsibilities for arriving at a price agreement.
The right hon. Gentleman then asked me for an explanation, to which I think the House is entitled, of the events of 12th May. We appreciated the peculiarities of the situation and the need for a close synchronisation of the announcement to this House of the agreement as regards the price with Imperial Airways' notification to their shareholders, to whom they felt they had the first duty, that the agreement had been arrived at. It was for this reason that a Friday was chosen. It will be within the recollection of the right hon. Gentleman that my right hon. Friend the Secretary of State, at 11 a.m. on a Friday, made the announcement to the House, arid it was by the first post on that morning that the shareholders of Imperial Airways received a circular letter stating that agreement had been arrived at and what the price was. On that Friday morning, at approximately 10.30 a.m., a letter went by hand


from Imperial Airways to the relevant department of the Stock Exchange —I think the shares and loans department, although, like the right hon. Gentleman, I am a child in these matters —and although the Stock Exchange opens at 11 o'clock, I understand that unofficial dealings can take place before that hour. Certain dealings did take place that morning before the announcement by the Secretary of State at 11 a.m., after which time dealings were suspended during the morning; but I can tell the House, from information I have managed to obtain, that out of approximately 1,500,000 shares, the amount that changed hands was about 500. Therefore, I do not think there was any manipulation or purchase or sale of the shares to an appreciable extent. I trust that the explanation I have given will show that the situation was appreciated and that we did our best to synchronise the two announcements.
I pass now to the speech of the hon. Baronet the Member for Berwick-on-Tweed (Sir H. Seely), who criticised the settlement with British Airways and said that the enormous figure of 15s. 9d. would be paid. I would only say that that figure does represent a loss to those who put up the money for British Airways to become a second chosen instrument, at the request of His Majesty's Government, and who, as my right hon. Friend said, might fairly be considered to have been on the verge of earning some reasonable return for the development expenditure in which they had involved themselves. However, my right hon. Friend wished to reassure himself and the Government that in these peculiar circumstances the price that was being paid was correct and therefore, at his request. Sir Frederick Marquis, Sir Andrew Duncan and Sir Archibald Campbell were asked to examine the offer finally made to British Airways, and these independent gentlemen reached the conclusion that the offer made was fair and reasonable.
I pass now to the speech of my hon. and gallant Friend the Member for Wallasey (Lieut. - Colonel Moore -Brabazon). I believe I shall be voicing the feelings of the whole House if I say that when we have No. 1 pilot in this country as a Member of this House, whether we agree or disagree with him in his speeches, his knowledge and experience merit our respect in all circumstances. I was particularly glad to feel

that this new effort in the development of civil aviation merited my hon. and gallant Friend's support except in one or two small respects as regards names and, as I have noted that he intends to raise the question in Committee, I do not feel that I need say anything about it now. He asked me a very important question as to whether the funds for research and development for new types of civil aircraft are to be independent of the grants which the corporation will receive under the Bill. My answer is Yes. The money for research and development will be borne on Air Votes under the appropriate head as a separate item as at present.
The hon. Member for Clay Cross (Mr. Ridley) asked me if I could divide up the payment to Imperial Airways as between subsidy and payment for specific services. I cannot do that because the subsidy is in respect of services rendered both as regards specific carriage —passengers, goods and mail —and also in respect of the building up of a great Imperial organisation and the development of routes and the general development of technical services. It will be manifestly impossible to subdivide the total paid to the company —what is due to specific carriage and what is due to intangible development. He asked three specific questions with regard to the staff. There is no bar at all to trade union membership, and the Fourth Schedule —this is in answer to the hon. Member for West Islington —sets out the safeguards of the employés as regards fair wages. There will be no interference with trade union rights, and it is our hope, and I believe the hope of Members in all parts of the House, that the staff relationships with the company, which the hon. Member for Stroud (Mr. Perkins) said had been improving, shall continue to be a model of relationship between employer and employed.

Mr. Montague: Will it be the policy of the corporation to accept the principle of collective representation?

Captain Balfour: Yes, we hope so: Certainly there is no bar to trade union representation, and it is our desire that the relations between the staff and the employers shall be so interpreted as to be a model to other bodies.
The second point that the hon. Member for Clay Cross asked about was the


superannuation fund, and he asked whether the staff were contented as regards the proposals. I understand that no representations have been received against the proposals in the Bill, which I think are really reasonable and fair. The two staff superannuation funds of the respective companies will continue, but it is intended, and the Bill makes provision for the formation of a new all-embracing staff superannuation fund, which any member belonging to either of the previous funds can opt into should he so desire, but there will be no compulsion if he does not wish to.
The third point that the hon. Member asked about was why is there no provision for staff compensation in the event of dismissal through redundancy. My reply to that is that all the staff of the two companies will be taken over, and a term of the contract of sale in the case of both companies is that all the staff shall be engaged. Indeed, we can look forward with some degree of confidence not only to the staffs of the two companies being engaged but to a considerable expansion of staff in the future as the corporation's activities extend and as the success which we hope will attend its efforts develops.

Mr. Ridley: I do not doubt the probability of that for a moment, but I think it unfortunate that, as a matter of pure principle, in legislation of this kind, since none of us can foresee with certainty what the next five years will bring, the House should be asked to assent to a Bill which does not contain a principle which is almost historic in all local government legislation and other legislation of a similar character that the House has been asked to approve.

Captain Balfour: I think the staff have adequate safeguards in the provisions of the Schedule and the terms of contract of sale. If one accepted the point that the hon. Member makes, it would virtually mean that in five years from now there might be some change of staff and some ex-member of one of the two companies now being taken over would leave the employ of the corporation. As far as I understand it, he says that man should be able to hark back to the previous days.

Mr. Ridley: Under the Act which established the Passenger Transport Board an employé of the board dis-

missed for reasons arising out of the amalgamation is automatically entitled to compensation for his loss of office. I only seek to see the same principle included in this Bill.

Captain Balfour: There is no question of dismissing anyone because of the formation of the corporation. As to the conditions of dismissal or retention of staff of the new corporation, that is not the point that I am discussing but, as in the terms of contract of sale there is a provision that all the staff shall be taken over, there are adequate safeguards for the existing staff.
The hon. Gentleman next touched on the question of internal air lines a question which was also raised by the Noble Lord the Member for Renfrew (Marquess of Clydesdale), my hon. and gallant Friend the Member for Hertford (Sir M. Sueter) and my hon. and gallant Friend the Member for Barkston Ash (Colonel Ropner). I do not think one can draw comparisons as regards competition, or as regards the circumstances under which internal and external lines operate. External lines are operating against the competition of foreign countries subsidised by their Governments. Internal lines have the protection now, against uncontrolled competition, of the licensing authority set up under the Air Navigation Act. The general policy on internal lines was set forth by my right hon. Friend on 18th May, 1938. The hon. and gallant Member for Barkston Ash and one or two other hon. Members tried to read into Clause 29 a meaning which does not exist. Clause 29 really gives statutory effect to what my right hon. Friend said on 18th May. To say that my right hon. Friend had previously power to divert subsidy to any extent over £100,000 to internal lines and that he had power to give subsidy beyond four years, is not in accord with that declaration of Government policy and I think it will answer many hon. Members if I read the relevant passages from what my right hon. Friend then said:
I would also like to say a word about the inland services in which I was very much interested when I was at the Post Office. We propose to devote some £100,000 to the inland services and we hope thus to help those companies which are suffering losses to establish themselves on a sound commercial footing and to enable all of them to press on with their services with even greater enterprise. The Government have therefore decided in


view of the special circumstances of the moment and with particular reference to the defence situation that a sum not exceeding £100,000 in the first year and diminishing progressively in the subsequent four years shall be earmarked out of the increased subsidy limit of £3,000,000 for the purpose of subsidising internal air lines. I want to make it clear that this assistance will be given on the clear understanding that the companies should endeavour to establish themselves on a paying basis before the end of the period, and that no further assistance of this kind can be looked for after that date."—[OFFICIAL REPORT, 18th May, 1938; col. 429, Vol. 336.]
I think that answers the questions about my right hon. Friend having previously had the power or the intention to go beyond the four years or beyond the £100,000 of annual subsidy. The Noble Lord the Member for Renfrew raised another point. He made a complaint that only five days were given before the lodging of petitions and said that it was too short a period. Internal lines really have not been very prompt if they wished to make representation because the Bill has been published for an unusually long period —since 12th June —and there has been plenty of time for petitions to have been prepared meanwhile in readiness to be presented on the first of the five days. Further, the Bill will finally come back to the House when undoubtedly any proposals such as the Noble Lord put forward can be considered.

Mr. Garro Jones: The hon. and gallant Gentleman says the Bill has been published for a certain length of time but how long has the Resolution appointing the select committee been published and has it been effectively published otherwise than on the Order Paper of the House?

Captain Balfour: I cannot tell the exact time at which the Resolution was published to send the Bill to a select committee, but any student of procedure like the hon. Member could have foreseen full well that the Bill was of a character which had to go to a select committee.

Marquess of Clydesdale: Arising from the point about competition, can the hon. and gallant Gentleman guarantee that the Secretary of State for Air will not allow the corporation to compete with internal air lines inside this country?

Captain Balfour: I was coming to that very point. The corporation has powers to run internal lines only subject to the specific permission and assent of my right

hon. Friend. The powers are enabling powers. Any corporation of this size must take wide powers which it may never use, but I am authorised by my right hon. Friend to say that there is no intention of the corporation running internal air lines. Nevertheless, like a private company's memorandum of articles of association, which specify very wide powers for the company, so this corporation should have these powers. Furthermore, internal lines have the protection of the licensing authority, because no one, whether it be the corporation or whether it be an internal line, could run a line in this country without the authority and licence of the licensing body. If it is not clear that the corporation is not above the law in this respect, we are willing to clarify the point in Committee.

Mr. Marshall: Will it be possible under the Bill for the corporation to establish an aerodrome and run it in competition with the local authorities which have been endeavouring to fulfil the desire of the Ministry and have been doing it at a loss: and is it not a fact that those authorities will have only five days in which to make any protest against this procedure?

Captain Balfour: I think the hon. Member is referring to the Aerodrome Owners Association, of whose point of view I am fully aware. These authorities can be represented before the committee. It is possible in theory for the corporation to organise its own airport, but in practice there is no intention at all of the corporation so doing. Again it is but a wide enabling power such as you will find in the memorandum of articles of association of a limited liability company, and it is a mere protection, because it might conceivably be that in the future at some time the corporation might find need of an aerodrome, and these people who have so worthily devoted time and money to establishing airports might not be in a position to fulfil the need, and only in such a case would my right hon. Friend consider using the powers given to him under the Bill. My hon. and gallant Friend the Member for Hertford and one or two other hon. Members asked about the ordering of aircraft. These will be ordered and paid for by the corporation, but the capital expenditure, if it were, as it would be, of a major character, would have to be sanctioned by my right hon. Friend, and obviously he would sanction


that capital expenditure only after due regard had been paid by the Air Ministry to the findings of the Civil Aviation Development Committee, which would endeavour to correlate the needs of the corporation and the need of being able to fulfil the orders of the commercial markets of the world for British aircraft.
My hon. Friend the Member for South-East St. Pancras (Sir A. Beit) asked what would happen after 1953. I do not think any of us in this House need worry ourselves unduly about what will happen after 1953, but the power of the Government to give grants to this corporation ceases after 1953, and I believe that neither those who oppose the principle, those who support the principle, nor those who are doubtful about the principle could take exception to having an opportunity of reviewing the work of the corporation, of ascertaining how it had functioned and whether it had fulfilled the hopes which we have had for it, should it be necessary in 1953. The hon. Member for South-East St. Pancras also asked about the participation of Empire air lines and mentioned Wilson Airways of Kenya and the Rhodesian Airways. The present position is protected as regards share interests and operational contracts, and provision is made to enable such contracts to be made in the future. He also asked why pilots must belong to the Royal Air Force or the Air Force Reserve. He is under a misapprehension. The Bill provides that a certain number of pilots to be specified by my right hon. Friend are to have a reserve liability, as in the case of Imperial Airways personnel. The hon. and gallant Member for Nuneaton (Lieut.-Commander Fletcher) asked various questions, but as he is not here, I think I may be allowed to write to him and save the time of the House. The hon. and gallant Member for Erdington (Wing-Commander Wright) asked me for certain foreign subsidy figures. I cannot give them at the present time. He also asked why we cannot have freight aircraft. That is one of the very points which the Aviation Development Committee should be able to study and advise the Government upon.
I have endeavoured to answer the majority of questions which have been put to me to-night, and I want to finish

up in this way: As the hon. and gallant pioneer the Member for Wallasey said, civil aviation has turned away from the immediate concentration on a commercial objective. It seems a long while since the right hon. Member for Epping (Mr. Churchill) said in 1921 that civil aviation must fly by itself. Civil aviation seems to have become more and more an instrument of international policy, with services pushed out like tentacles for the purpose, often, not of commerce but of national prestige; and, indeed, the difference between the original conception of civil aviation and the present one is shown in the difference of mandates between Imperial Airways and the corporation to which my right hon. Friend referred in his opening speech. He pointed out how Imperial Airways were told to use their best endeavours to make the services self-supporting at the earliest possible moment, and how the corporation are now to secure the fullest development, consistent with economy, of efficient transport services.
I believe that one of the reasons why we in this country lag behind in civil aviation is that in addition to our concentration upon military efforts. which has affected greatly our ability to compete in the world's markets in civil aviation, we have clung too long to the idea of trying to achieve economy while other countries have abandoned it, We want this corporation to be a live body, we do not want it to be a home for retired gentlemen, whatever their rank or achievements. The Second Reading of this Bill is giving the House an opportunity of reviewing our present position. Hon. Members on all sides have said, and my right hon. Friend has admitted, that all is not well with our civil aviation at the present time; none can be satisfied, least of all those responsible for its direction at the present time; and I feel that I should be neglecting my duty if I did not tell the House that the immediate future is not going to be easy. Our military concentration is continuing. It takes one, two or three years to build aircraft and the air ports; also it takes some time to develop and train the necessary crews for air liners.
This Bill is sowing for the future to reap. We are at present passing through a period when we can harvest little from past sowing. We shall get through this


period —I am sure of it —and I am convinced also that our civil aviation is going to lead the civil aviation of the world in the years to come; but just as I am dissatisfied with the present so I would appeal to the House, and, indeed, to the country, for an appreciation and understanding of the present position. It is going to take two or three years to remedy the present situation and for us to catch up our lag.
Civil aviation will for some time yet present an easy target to criticism. If I were on the benches opposite there would be almost no limit to the number of embarrassing questions which I could ask on the subject of this Bill but I would ask myself whether those questions would be really helpful, critical and such as would spur on those concerned to greater

efforts, or whether they would be questions which would expose weaknesses which, with the best will in the world, cannot be remedied except with the passage of time. While I suggest that the use of the spur should in no way be denied I make an appeal to the House to help us with constructive suggestion and frank criticism in a spirit which will help and which will advance civil aviation during the period which we have ahead of us. I believe that in the end our civil aviation will be the best in the world and that the Bill is the first major step towards that end.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 209; Noes, 130.

Division No. 225.]
AYES.
[10.32 p.m.


Acland-Troyte, Lt.-Col. G. J.
Donner, P. W.
Kerr, Colonel C. I. (Montrose)


Adams, S. V. T. (Leeds, W.)
Dorman-Smith, Col. Rt. Hon. Sir R. H.
Kerr, Sir John Graham (Soo'sh Univs.)


Albery, Sir Irving
Drewe, C.
Kimball, L.


Allen, Col. J. Sandeman (B'knhead)
Dugdale, Captain T. L.
Lamb, Sir J. Q.


Anderson, Rt. Hn. Sir J. (So'h Univ's)
Dunoan, J. A. L.
Lancaster, Lieut.-Colonel C. G.


Anstruther-Gray, W. J.
Eckersley, P. T.
Leech, Sir J. W.


Aske, Sir R. W.
Ellis, Sir C.
Leighton, Major B. E. P.


Assheton, R.
Elliston, Capt. G. S.
Lipson, D. L.


Balfour, G. (Hampstead)
Emmott. C. E. G. C.
Llewellin, Colonel J. J.


Balfour, Capt. H. H. (Isle- of Thanet)
Errington, E.
Lloyd, G. W.


Barrie, Sir C. C.
Erskine.Hill, A. G.
Looker-Lampion, Comdr. O. S.


Beamish, Rear-Admiral T. P. H.
Fildes, Sir H.
Loftus, P. C.


Beaumont, Hon. R. E. B. (Portsm'h)
Flndlay, Sir E.
Mabane, W. (Huddersfield)


Bernays, R. H.
Fleming, E. L.
MeCorquodale, M. S.


Blair, Sir R.
Fremantle, Sir F. E
MacDonald, Rt. Hon. M. (Ross)


Bottom, A. C.
Furness, S. N.
Macdonald, Capt. P. (Isle of Wight)


Boulton, W. W.
Gilmour, Ll.-Col. Rt. Hon. Sir J.
MeEwen, Capt. J. H. F.


Bower, Comdr. R. T.
Gluekstein, L. H.
McKle, J. H.


Boyce, H. Leslie
Glyn, Major Sir R. G. C.
Magnay, T.


Broadbridge, Sir G. T
Goldie, N. B.
Makins, Brigadier-General Sir Ernest


Brocklebank, Sir Edmund
Gower, Sir R. V.
Manningham-Buller, Sir M.


Brooke, H. (Lewisham, W.)
Greene, W. P. C. (Worcester)
Margesson, Capt. Rt. Hon. H. D. R.


Brown, Rt. Hon. E. (Leith)
Gridley, Sir A. B.
Markham, S. F.


Brown, Brig.-Gen. H. C. (Newbury)
Grimston, R. V.
Mills, Major J. D. (New Forest)


Browne, A. C. (Belfast, W.)
Gritten, W. G. Howard
Mitchell, H. (Brentford and Chiswick)


Bull, B. B.
Hacking, Rt. Hon. Sir D. H.
Moore-Brabazon, Lt.-Col. J. T. C.


Bullock, Capt. M.
Hammarsley, S. S.
Morris-Jones, Sir Henry


Burgin. Rt. Hon. E. L.
Hannah, I. C.
Morrison, G. A. (Scottish Univ's.)


Butcher, H. W.
Hannon, Sir P. J. H.
Muirhead, Lt.-Col. A. J.


Campbell, Sir E. T.
Harbord, Sir A.
Munro, P.


Cary, R. A.
Haslam, Henry (Horncastle)
Nail, Sir J.


Channon, H.
Haslam, Sir J. (Bolton)
Nicholson, G. (Farnham)


Chapman, A. (Rutherglen)
Haly-Hutchinson, M. R.
O'Connor, Sir Tarence J.


Clarke, Colonel R. S. (E. Grinstead)
Heneage, Lieut.-Colonel A. P.
O'Neill, Rt. Hon. Sir Hugh


Clydesdale, Marquess of
Hepburn, P. G. T. Buchan-
Palmer, G. E. H.


Cobb, Captain E. C. (Preston)
Hepworth, J.
Perkins, W R. D.


Colfox, Major Sir W. P.
Herbert, A. P. (Oxford U.)
Piekthorn, K. W. M.


Colman, N. C. D.
Hoare, Rt. Hon. Sir S.
Ponsonby, Col. C. E.


Colville, Rt. Hon. John
Hogg, Han. Q. McG.
Porrilt, R. W.


Cock, Sir T. R. A. M (Norfolk, N.)
Homes, J. S.
Pownall, Lt.-Col. Sir Assheton


Cooke, J. D. (Hammersmith, S.)
Horsbrugh, Flerence
Radford, E. A.


Cooper. Rt. Hn. T. M. (E'nburgh, W.)
Howitt, Dr. A. B.
Raikas, H. V. A. M.


Courthope, Col. Rt. Hon. Sir G. L.
Hudson, Capt. A. U. M. (Hack., N.)
Ramsbotham, Rt. Hon. H.


Craven-Ellis, W.
Hume, Sir G. H.
Reed, Sir H. S. (Aylesbary)


Crooke, Sir J. Smedley
Hunloke, H. P.
Reid, W. Allan (Derby)


Crookshank, Capt. Rt. Hon. H. F. C.
Hunter, T.
Remer, J. R.


Crossley, A. C.
Hutchinson, G. C.
Rickards, G. W. (Skipton)


 Crowder, J. F. E.
Inskip, Rt. Hon. Sir T. W. H.
Ropner, Colonel L.


Culverwell, C. T.
Jarvis, Sir J. J.
Rosbotham, Sir T.


Davies. C. (Montgomery)
Jones, Sir G. W. H. (S'k N'w'gt'n)
Ross Taylor, W. (Woodbridga)


Denman, Hon. R. D.
Jones, L. (Swansea W.)
Rowlands, G.


Dsnville, Alfred
Keeling, E. H.
Royds, Admiral Sir P. M. R.




Ruggies-Brise, Colonel Sir E. A.
Spears, Brigadier-General E. L.
Watt, Lt.-Col. G. S. Harvie


Russell, Sir Alexander
Strauss, H. G. (Norwich)
Webbe, Sir W. Harold


Russell, S. H. M. (Darwen)
Strickland, Captain W. F.
Whiteley, Major J. P. (Buekingham)


Salmon, Sir I.
Stuart, Rt. Hon. J. (Moray and Nairn)
Wickham, Lt.-Col. E. T. R.


Salt, E. W.
Sueter, Rear-Admiral Sir M. F.
Williams, C. (Torquay)


Schuster, Sir G. E.
Sutoliffe, H.
Williams, H. G. (Croydon, S.)


Scott, Lord William
Tasker, Sir R. I.
Willoughby de Eresby, Lord


Selley, H. R.
Taylor, Vice-Adm. E. A. (Padd., S.)
Windsor-Clive, Lieut -Colonel G.


Shakespeare, G. H.
Thomson, Sir J. D. W.
Womersley, Sir W. J.


Shaw, Captain W. T. (Forfar)
Thorneyoroft, G. E. P.
Wood, Hon. C. I. C.


Shepperson, Sir E. W.
Thornton-Kemsley, C. H.
Wood, Rt. Hon. Sir Kingsley


Simmonds, O. E.
Titohfield, Marquess of
Wragg, H.


Simon, Rt. Hon. Sir J. A.
Tryon, Major Rt. Hon. G. C.
Wright, Wing-Commander J. A. C.


Smith, Bracewell (Dulwich)
Tufnell, Lieut.-Commander R. L.
Young, A. S. L. (Partick)


Smith, Sir R. W. (Aberdeen)
Wakefield, W. W.



Smithers, Sir W.
Wallace, Capt. Rt. Hon. Euan
TELLERS FOR THE AYES.—


Snadden, W. McN.
Ward, Lieut.-Col. Sir A. L. (Hull)
Captain Waterhouse and Major


Somervell, Rt. Hon. Sir Donald
Ward, Irene M. B. (Wallsend)
Sir James Edmondson.


Southby, Commander Sl. A. R. J.
Warrender, Sir V.





NOES.


Adams, D. (Consett)
Halt, G. H. (Aberdare)
Paling, W.


Adam., D. M. (Poplar, S.)
Hall, J. H. (Whitechapel)
Parker, J.


Adamson, Jennie L. (Dartford)
Hardie, Agnes
Pearson, A.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Harris, Sir P. A.
Pethick-Lawrence, Rt. Hon. F. W.


Ammon, C. G.
Hayday, A.
Poole, C. C.


Banfield, J. W.
Henderson, A. (Kingswinford)
Price, M. P.


Barnes, A. J.
Henderson, J. (Ardwick)
Richards, R. (Wrexham)


Barr, J.
Henderson, T. (Tradeston)
Ridley, G.


Batey, J
Hills, A. (Pontefraet)
Riley, B.


Benn, Rt. Hon. W. W.
Hopkin, D.
Ritson, J.


Benson, G.
Hopkinson, A.
Robinson, W. A. (St. Helens)


Bevan, A.
Isaacs, G. A.
Rothsohild, J. A. de


Broad, F. A.
Jagger, J.
Seely, Sir H. M.


Buchanan, G.
Jenkins, A. (Pontypool)
Sexton, T. M.


Burke, W. A.
Jenkins, Sir W. (Neath)
Shinwell, E.


Cape, T.
Johnston, Rt. Hon. T.
Silkin. L.


Charleton, H. C.
Jones, Sir H. Haydn (Merioneth)
Silverman, S. S.


Chater, D.
Kennedy, Rt. Hon. T.
Smith, Ben (Rotherhithe)


Cluse, W. S.
Kirby, B. V.
Smith, E. (Stoke)


Collindridge, F.
Lawson. J. J.
Smith, Rt. Hon. H. B. Lees- (K'ly)


Cove, W. G.
Leach, W.
Smith, T. (Normanton)


Cripps, Hon. Sir Stafford
Lee, F.
Sorensen, R. W.


Daggar, G.
Leslie, J. R.
Stephen, C.


Dalton, H.
Logan, D. G.
Stewart, W. J. (H'ghtn.le-Sp'ng)


Davidson, J. J. (Maryhill)
Lunn, W.
Summerskill, Dr. Edith


Davies, R. J. (Westhoughton)
Macdonald, G. (Ince)
Taylor, R. J. (Morpeth)


Davies, S. O. (Merthyr)
McEntee, V. La T.
Thurtle, E


Dobbie, W.
McGhee, H. G.
Tinker, J. J.


Dunn, E. (Rother Valley)
MacLaren, A.
Viant, S. P.


Ede, J. C.
Maclean, N.
Walkden, A. G.


Edwards, A. (Middlesbrough E.)
Mainwaring, W. H.
Watkins, F. C.


Edwards, Sir C. (Bedwelty)
Marshall, F.
Watson, W. McL.


Edwards, N. (Caerphilly)
Mathers, G.
Welsh, J. C.


Fletcher, Lt.-Comdr. R. T. H.
Maxton, J.
Westwood, J.


Gallacher, W.
Messer, F.
White, H. Graham


Gardner, B. W.
Milner, Major J.
Whiteley, W. (Blaydon)


Garro Jones, G. M.
Montague, F.
Williams, E. J. (Ogmore)


Gibson, R. (Greenock)
Morgan, J. (York, W.R., Doneaster)
Williams, T. (Don Valley)


Green, W. H. (Deptford)
Morrison, Rt. Hon. H. (Hackney, S.)
Wilson, C. H. (Atteroiffe)


Grenfell, D. R.
Morrison, R. C. (Tottenham, N.)
Windsor, W. (Hull, C.)


Griffith, F. Kingsley (M'ddl'sbro, W.)
Nathan, Colonel H. L.
Woods, G. S. (Finsbury)


Griffiths, G. A. (Hemsworth)
Naylor, T. E,
Young, Sir R. (Newton)


Groves, T. E.
Oliver, G. H.



Guest, Dr. L. H. (Islington, N.)
Owen, Major G.
TELLERS FOR THE NOES.—




Mr. Adamson and Mr. Anderson,


Question put, and agreed to.

Bill committed to a Select Committee of Seven Members, Four to be nominated by the House and Three by the Committee of Selection. —[Sir K. Wood.]

Motion made, and Question proposed,
That all Petitions against the Bill, presented at any time not later than five clear days after the Second Reading of the Bill, be referred to the Committee." —[Sir K. Wood.]

10.40 p.m.

Mr. Craven-Ellis: I beg to move, to leave out "five," and to insert "ten."
The reason I move this Amendment is that municipal authorities, who have incurred very heavy expenditure in providing aerodromes, want to have time to examine their position under the Measure, and the five days allowed would give them very little opportunity.

Major Milner: I beg to support the Amendment. I know that five clear days is the usual period, but I think it must have been overlooked that in this case the five days will expire, in fact, on a Sunday. The Government should give a little more time, as, under the Bill, the corporation may be able to acquire or construct aerodromes in competition with aerodromes held by local authorities.

10.42 p.m.

Sir K. Wood: I am anxious to meet the point which has been raised. This matter is urgent, but, in order to meet the question of the Sunday, I am prepared, if my hon. Friend will withdraw his Amendment to move that the period shall be six days instead of five.

Mr. Craven-Ellis: I am grateful to my right hon. Friend for offering to make the period six days, and I am prepared to accept the offer.

Amendment, by leave, withdrawn.

Sir K. Wood: I beg to move, to leave out "five," and to insert "six."

Amendment agreed to.

Ordered,
That all Petitions against the Bill, presented at any time not later than six clear days after the Second Reading of the Bill, be referred to the Committee.

Ordered,
That the Petitions against the Bill may be deposited in the Committee and Private Bill Office, provided that such Petitions shall have been prepared and signed in conformity with the Rules and Orders of this House relating to Petitions against Private Bills.

Ordered,
That the Petitioners praying to be heard by themselves, their Counsel, or Agents, be heard against the Bill, and Counsel or Agents heard in support o the Bill.

Ordered,
That the Committee have power to report from day to day the minutes of evidence taken before them.

Ordered,
That the Committee have power to send for persons, papers, and records.

Ordered,
That three be the Quorum." —[Sir K. Wood.]

Orders of the Day — BRITISH OVERSEAS AIRWAYS [Money].

Considered in Committee under Standing Order No. 69.

[Sir DENNIS HERBERT in the Chair.]

Resolved,
That for the purposes of any Act of the present Session to make provision, amongst other matters, for the establishment of a British Overseas Airways Corporation, and to make further and better provision for the operation of air transport services, it is expedient —
A. To charge on the Consolidated Fund any sums required by the Treasury for fulfilling any guarantee of the redemption or repayment of, and the payment of interest on, any stock issued or temporary loan raised by the corporation, being stock or loans the aggregate amount of the principal whereof outstanding at any time (exclusive of amounts borrowed for redeeming stock or paying off a loan) does not exceed ten million pounds.
B. To authorise the payment into the Exchequer of —

(a) any sums received by way of repayment of sums issued out of the Consolidated Fund for fulfilling any such guarantee as aforesaid or by way of interest thereon; and
(b) any sums paid by the corporation to the Secretary of State under the said Act.

C. To authorise the payment out of moneys provided by Parliament of —

(a) grants to the corporation of such amounts as may be determined by the Secretary of State under the said Act;
(b) such grants as the Secretary of State may agree to make in consideration of undertakings with respect to overseas air transport services entered into with him by any company in which the corporation has a financial interest and to which a subsidy is payable by the Government of some country other than the United Kingdom in consideration of corresponding undertakings entered into by that company with that Government; and
(c) any expenses incurred by the Secretary of State in the provision of facilities for the operation of aircraft of the corporation or of any such company as aforesaid;

Provided that the aggregate amount of the grants to be made under this Resolution in any financial year, when added to the aggregate amount of any subsidies paid in that year under agreements made before the commencement of the said Act in pursuance of Section one of the Air Navigation Act, 1936, as amended by the Air Navigation (Financial Provisions) Act, 1938, shall not exceed four million pounds, and no such grant shall be made after the thirty-first day of December,


nineteen hundred and fifty-three." —(King's Recommendation signified.). —[Sir K. Wood.]

Resolution to be reported To-morrow.

Orders of the Day — CIVIL DEFENCE BILL.

Order for consideration of Lords Amendments read.

Motion made, and Question, "That the Lords Amendments be now considered," put, and agreed to. —[Sir J. Anderson.]

Lords Amendments considered accordingly.

CLAUSE 2. —(Designation of premises.)

Lords Amendment: In page 3, line 10, at the end, insert:
(6) Where the occupier of any designated premises holds any part of the premises on lease, he shall immediately he becomes aware of the designation of the premises, serve upon his immediate landlord or, where he holds different parts of the premises under different landlords, on each of his immediate landlords, notice that the premises have been designated under thisSection and each person upon whom such a notice is served in satisfaction of an obligation imposed by this Subsection shall forthwith himself serve a copy of the notice upon his immediate landlord or landlords, if any.

10.46 p.m.

The Lord Privy Seal (Sir John Anderson): I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment applies in respect of designated premises. The principle is already accepted that information as to designation shall be conveyed to all who might be interested. There is no new principle involved.

10.47 p.m.

Mr. Ede: It is true that this carries a little further the principle already in the Bill, but I should like to know what is to happen to the occupier of the designated premises who receives this notice and fails to pass it on. As far as we have been able to discover there is no penalty in the Bill that will fall upon him if he fails to pass on the information. Such failure might be collusive between him and his immediate landlord, and such collusive failure, quite apart from ordinary failure, might lead to serious delays and difficulties in carrying out the provisions of the Clause. It appears to be a very-

common thing in this Bill to put very onerous duties upon people and then leave the local authority or other authority charged with carrying out the Measure without possible means of enforcing those duties or securing the infliction of a penalty if there is a failure. I should like to know the exact position with regard to this Amendment.

10.49 p.m.

Sir J. Anderson: This Amendment is on all fours with an Amendment which was accepted in Committee in similar circumstances. The purpose is merely to secure that information should be conveyed. Nothing follows on the conveying of the information. No consequences follow, and there is not here, as the hon. Member has pointed out, nor was there in the other case, any penalty specifically provided for failure to pass on the information. The two cases are absolutely on all fours, and the earlier Amendment suggested that it was desirable to make the present Amendment.

Mr. Ede: Are they not both equally thoroughly unsatisfactory?

Clause 4. —(Execution of works.)

Lords Amendment: In page 4, line 11, after "determination," insert "or" abandonment."

Sir J. Anderson: I beg to move "That this House doth agree with the Lords in the said Amendment."
This is a drafting Amendment, designed to recognise the possibility of the abandonment of an appeal without formal determination.

Subsequent Lords Amendment in page 5, line 9, agreed to.

CLAUSE 6. —(Compensation where works are executed.)

Lords Amendment: In page 6, line 18, at the end, insert:
(4) Where a local authority restore any premises, building or land in accordance with the last foregoing Sub-section, the occupier of the premises, building or land shall be entitled to recover from the local authority compensation for any damage he has sustained by reason of any interference with his use of the premises, building or land during the execution of the work.

Mr. Speaker: This Amendment raises a question of Privilege. It involves a charge on local authorities.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
In the view of the Government this Amendment removes a difficulty that is apparent in the Clause as it left this House. Hon. Members will remember that compensation is provided for damage sustained by an occupier as the result of interference with his use of the premises while works are being carried out. This Amendment deals with the converse case, where, after designation has been withdrawn, the premises are restored, and it is possible that during the process of restoration there may be some interference with the use of the premises by the occupier. In the view of the Government it is only reasonable that provision should be made for the payment of compensation.

Clause 7. —(Powers of local authorities to construct underground shelters and other premises required for civil defence purposes.)

Lords Amendment: In page 6, line 34, leave out "the underground shelter or premises," and insert:
any such underground shelter or premises by virtue of this Section.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is a drafting Amendment intended to make it clear that the provisions of the Sub-section are really designed to meet the case where the local authority derives its power to carry out the works from the Section itself, and are not intended to be applicable where the local authority is carrying out works on land already under the control of the authority.

Lords Amendment: In page 7, line 27, at the end insert:
and the authority shall be entitled to do anything reasonably necessary for the maintenance of any such shelter, premises, entrances, shafts or works and shall have such powers of entry as are necessary for that purpose.

Mr. Speaker: Both this and the next Amendment raise a question of Privilege.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
The Amendment is designed to meet a point that was raised in this House and for which consideration was promised on the Report stage. It was pointed out by my hon. and learned Friend the Member for Ashford (Mr. Spens) and the hon. Member for South Shields (Mr. Ede) that provision had not been made to ensure that the local authority should have the necessary power to do what was required for the maintenance of any shelter or other works that might be carried out under the provisions of the Clause, and should also have such powers of entry as might be necessary for the purpose. This Amendment, in the view of the Government, repairs that omission.

Subsequent Lords Amendment to page 7, line 31, agreed to.

Lords Amendment: In page 7, line 37, after "undertakers," insert:
or persons carrying on any hydraulic power undertaking.

Sir J.Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment and a number of Amendments that follow may be described as drafting, designed to include in the same position as public utility undertakers, persons carrying on any hydraulic power undertaking.

Subsequent Lords Amendments, to page 7, line 31, agreed to.

CLAUSE 15. —(Power of occupier or owner to execute works.)

Lords Amendment: In page 14, line 42, leave out from "land" to the end of line 43, and insert "appurtenant to the mine or building."

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
The Amendment is little more than drafting, but I think I had better explain the purpose that it is designed to secure. As the Clause stood before the Amendment, it was open possibly to some doubt whether the powers given to an owner to execute works might not extend to the


carrying out of works on property in his occupation which was not really part of the property in question. That is to say, if a person had an estate extending to two adjacent premises it might have been argued, as the Clause stood, that the owner could enter upon the neighbouring premises for the purpose of providing shelter there for persons working in the other premises. The insertion of the words "appurtenant to the mine or building" is designed to make it perfectly clear that the works in question must be carried out —to use a simple term which is not open to misapprehension —within the same curtilage.

10.56 p.m.

Dr. Haden Guest: It does not seem to be quite clear what the effect of this change of words will be in the case of premises in which it is desired to make an entrance to an air-raid shelter on land immediately adjacent to the premises but not belonging to the premises or, to use the words of the Amendment "appurtenant" to the premises. The Amendment takes out the word "adjacent" to the mine or building, and puts in the word "appurtenant" to the mine or building. What is to be the position in regard to a particular building which is adjacent to the place or land, or whatever it may be, which is not within the ownership of the individual but which it is necessary to use in order to get an entrance to an air-raid shelter or to get an exit? It seems to me that in such a case there would be a difficulty in the matter and that if the word "adjacent" had been left in it would permit the entrance to be made, whereas if the word "appurtenant" is put in it would seem to limit the right of the usage of the land and would, therefore, create a difficulty which I do not see how the right hon. Gentleman is going to get over.

11.0 p.m.

Sir J. Anderson: If I have correctly understood the point I would suggest that the consideration to which the hon. Member has called attention does not really arise in connection with this case. In the Clause as originally drawn that power of the owner only came into existence in respect of land to which his estate or interest extended. It therefore gave him no power to carry out works or to provide exits except on land over which

he had an estate or interest. The consequence of the Amendment is to limit that power to a certain extent so that an owner shall only be entitled to carry out works within the premises or land belonging to the premises in respect of which shelter is to be provided.

11.2 p.m.

Mr. Gallacher: The Minister has explained that in some cases it may not be possible or convenient to provide the necessary shelter, and that shelter would have to be provided apart from the undertaking itself. How would the Amendment apply in the case where shelter is provided apart from the undertaking?

11.3 p.m.

Sir J. Anderson: I do not think the Amendment affects that case at all. It is designed to meet a case, which will occur only very rarely and more or less by accident. You have a commercial building with a certain amount of land attached to it; the building and the land are the property of the same person. As the Clause stood that person could carry out work either within the building or on the land. The whole purpose of the Clause was to ensure that the owner should have the power to carry out such works. It might happen in exceptional cases that the same person owns two buildings with land adjacent to each, the blocks being contiguous, and it might be argued that the Clause as it left the House said that the owner would be entitled for the purpose of providing shelter for the occupants of building A to go to building B, and on the land pertaining to building B to provide shelter for persons occupying building A, perhaps to the serious detriment of the interests of the people ocupying building B. The effect of the Amendment is to ensure that the two cases shall be kept quite separate, and that the accident that the two blocks of buildings with the land adjacent in each case are in the possession of the same owner shall not be allowed to affect theposition. I think it is a perfectly reasonable Amendment which carries out the original intention of the Clause, and I hope I have succeeded in making the matter clear.

Subsequent Lords Amendments to page 19, line 2, agreed to.

CLAUSE 27. —(Affixing of appliances provided by the Crown for strengthening basements.)

Lords Amendment: In page 30, line 24, at the end, insert:
Provided that, if the local authority in executing works in or under any part of the highway cause any damage to any mains, pipes, apparatus or works belonging to public utility undertakers or persons carrying on any hydraulic power undertaking, they shall repay to the undertakers or persons the amount of the expenses reasonably incurred by them in making good the damage.

Mr. Speaker: I have to inform the House that this Amendment raises a question of Privilege.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
The House will remember that under Clauses 7, 8 and 9 which deal with underground shelters, underground car parks, and air-raid shelters in streets, provision is made for the repayment by the local authority of any expensesreasonably incurred in making good damage caused to mains, pipes, apparatus or other works of a public utility undertaker. The effect of this Amendment is to provide that if, in the process of providing an alternative exit to a strengthened basement, damage is done to the pipes or other property of a public utility undertaker, a similar provision should apply with regard to the repair of the damage. The provision is confined to damage which may be caused to work under the street. The Amendment seems to theGovernment to be reasonable and in accordance with provisions made elsewhere and agreed to by the House.

CLAUSE 30. —(Provision of air-raid shelter in certain buildings.)

Lords Amendment: In page 32, line 23, after "Act" insert:
is wholly or mainly used for residential purposes.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is the first of a series of Amendments to the Clause dealing with the provision of shelters in blocks of flats which was inserted in the Bill at a late stage in the proceedings in this House. Hon.

Members will recall that, when the Clause was introduced, the provision made was of a permissive character, but subsequently an Amendmentwas accepted placing a definite obligation upon the owner of the properties in question, so that what had previously been a matter of discretion on the part of the owner became a definite legal obligation. As a result of that change, certain consequential modifications were thought to be necessary. The object of all these changes is to avoid overlapping, and possibly, conflicting obligations. I think hon. Members will appreciate that, as long as the matter was left entirely optional, a certain amount of overlapping might not matter, but when it became an obligation, it was essential to ensure that the obligation should be adjusted to other obligations imposed by other provisions of the Bill. This particular Amendment is necessary to ensure that premises which are not mainly residential are excluded from the scope of the Clause; in other words, that premises which under the Bill are treated as commercial buildings or factory premises, in respect of which definite obligations of an entirely different character have been imposed by other provisions of the Bill, should be excluded.

Lords Amendment: Leave out lines 24 to 26, and insert:
Provided that —

(a) so much of any building or block of buildings as consists of, or is comprised in, any factory premises or commercial building shall be disregarded;
(b) the said expression does not include any building or block of buildings owned by any local authority;
(c) if and so long as arrangements are in existence under which particular classes of persons are provided free of charge on behalf of His Majesty with materials for air-raid shelter, the said expression does not include a building or block of buildings in the case of which the majority of the occupiers of the residential parts fall within those classes.

and any question whether any building or block of buildings is or is not excluded from the operation of this Section by virtue of paragraph (c) of this proviso shall be referred to the Minister whose decision shall be final.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
Following on what I have said, I may explain that the first paragraph of this


proposed proviso prevents overlapping in respect of factory premises or commercial buildings and the second paragraph excludes any building or block of buildings provided by a local authority. That is because it is considered quite unsuitable that the Clause should be applied to blocks of flats provided by local authorities partly at the expense of the Exchequer and wholly from public funds. The object there is to ensure that rents should be kept at a very reasonable level, whereas the essence of the Clause is that the cost of providing shelter should be passed on to the tenants in the form of an increase of rent. Paragraph (c) is designed to meet the case of workers' dwellings where the occupants are entitled, under arrangements made by the Government, to have materials for shelter provided for them free. It was considered equally that in that case the provisions of the Clause which impose the cost of providing shelter upon the tenants are not properly applicable.

11.12 p.m.

Mr. Ede: My hon. Friends and I attach considerable importance to this Amendment and we regret to see paragraph (c) and the words which follow it included in the Amendment. Unless there is some better explanation than the right hon. Gentleman has given, we shall feel compelled to divide against it. I should have preferred to try to single out paragraph (c) and move its deletion, but I understand that the stage is too late for doing that. I want to make it clear that we are not objecting to paragraphs (a) and (b). When we come to paragraph (c), it really appears to me that the explanation given by the right hon. Gentleman was quite inadequate. The paragraph in the first place has a far wider application than he gave it, because if you take an old mansion which has been divided up into flats at various rentals, occupied by persons in very different occupations and social classes, if the majority of the tenants are persons belonging to the class who would be entitled to a free shelter, the whole building, both for these people and for the people who are not entitled to a free shelter, comes out of the Clause and the people who are not entitled to the free shelter cannot get the advantages which were secured by the Amendment that I moved on the Report stage. That

appears to me to be a quite indefensible position.
Now let us consider the case of persons who are entitled to a free shelter of the type with which the right hon. Gentleman's name will be associated, long after the shelters themselves have disappeared. Even if such a person gets the shelter free, in the majority of cases he has nowhere to put it. He may be living in a block of flats or a converted mansion and have no right to use the ground adjoining his dwelling-place. The right hon. Gentleman did not say so, but I understand it will be the case where there is a building entirely inhabited by persons who are entitled to free shelters, that if they have nowhere to put the shelter, the local authority will, by arrangement with the occupiers of the flats or in some other way have to provide shelter for those people. But the right hon. Gentleman did not say so and I understand that no arrangement has been made with the local authorities. We hope the right hon. Gentleman may see his way even now to try to meet the situation. I assure him this is not a London problem alone, but affects my constituency and also the constituency of the hon. Member for Jarrow (Miss Wilkinson) and other places on Tyneside. There are big houses there including one in which the Lord President of the Council was born, divided up into flats, some let at low rentals to persons of small means, while the larger and more habitable apartments are let to people with higher incomes. There are working-class flats in connection with which there is no place where a shelter can be placed. In view of the large number of people involved, we must resist this Amendment.

Miss Wilkinson: Do I understand that where poor people are living in rack-rented houses, and paying already far beyond their capacity, the landlord under this proposal will be able to pass on an increase of rent, which would not be passed on if they were tenants of a municipal house? If so, it seems an obvious injustice.

11.20 p.m.

Sir J. Anderson: If I might first take the point raised by the hon. Member for Jarrow (Miss Wilkinson), I think she has got what I tried to convey to the House quite wrong, if I may say so. The whole


purpose is to avoid using this Clause, which is really designed to deal with the middle-class and the luxury flat, to pass on to the tenants of working-class flats the cost of shelter which it is the policy of the Government to secure shall be provided for those people free. In the case of the block of flats owned by a local authority, it has been made quite clear that it is open to that authority to provide shelter at the expense of public funds, and the shelter so provided will rank for Exchequer grant under the Act of 1937.
As regards the point that was raised by the hon. Member for South Shields (Mr. Ede), again I would remind the House that the purpose of the Clause was to cover a limited case, the case of the middle-class and luxury flat, and while it may be that there are borderline cases of blocks of flats which are occupied partly by people whose circumstances would entitle them to the provision of standard shelters free of cost and partly by people on a higher economic plane who would be expected normally to provide shelter for themselves, I suggest to hon. Members that for practical purposes you must, when you are dealing with a Clause that imposes definite obligations, see that you draw the line clearly and that you leave no room for doubt as to the side of the line upon which any particular block of buildings fall. For that reason, I suggest that we have no option but to accept this Amendment if we are to avoid possible confusion, and I would remind the House, with reference to what the hon. Gentleman said, that the normal method of providing shelter established under the Act of 1937, as amended by this Measure, is in the form of public shelter, and that the provision of private shelter was an expedient introduced a few months ago in order to expedite the provision of shelter and to limit, so far as possible, the burden falling upon local authorities in connection with the provision of public shelter. I announced in the House of Commons on 13th June thatin the case of working-class flats, whether owned by local authorities, charitable trusts, or ordinary private owners, occupied predominantly by persons who would be entitled to the free provision of one of the standard type of Government shelters—and we are not concerned only with the steel shelter to which the hon. Gentleman referred—that in those cases it would be proper for the local authority to provide shelter for the

occupants whether on or outside the premises under the provisions of the Act of 1937 and with the aid of the Exchequer grant payable under that Act. In the view of the Government, that is the course appropriate in those cases in which, as the hon. Gentleman suggested, there may be difficulty in finding land adjacent to the building on which those shelters could be provided.

11.25 p.m.

Sir Herbert Williams: In one part of my constituency there are a great many buildings of the type referred to by the hon. Member for South Shields (Mr. Ede), houses which once were mansions but now are subdivided and occupied by people of all income grades. I appeal to the Lord Privy Seal to reconsider his attitude with a view to asking another place to send this Amendment back to us with paragraph (c) deleted, because otherwise I am afraid that a substantial number of people will not get any shelter. The tenants are continually changing. One week flat A may be occupied by a person who is entitled to get a free shelter, and a few months later is occupied by someone above the £250 income limit, and if we are to treat this class of building in this exceptional way there will be a great deal of trouble. It is not a big issue from the national point of view, but it will give a lot of trouble, especially where a district is said to have "gone down." I hate the phrase, but it is one which we all understand. I regret to say that has happened in a part of my constituency, and I find myself with a measure of considerable sympathy for the view of the hon. Member for South Shields. It will take only a few minutes of Parliamentary time if the Lord Privy Seal will ask those in another place to reconsider their point of view.

11.27 p.m.

Mr. Silkin: Most Members will be profoundly disappointed by the statement of the Lord Privy Seal. Throughout the Second Reading, the Committee stage and the Report stage we were led to believe that it was the policy of the Government to close every gap and to provide protection for every section of the population. If this Clause is left at it stands there will be a substantial portion of the population left without any protection at all. In London in particular there are at least 50,000 persons living in dwellings of the


kind which are deliberately excluded by paragraph (c). The Lord Privy Seal has asked that they shall be left to the operations of the local authorities. In practice the local authorities are quite helpless to provide protection of the kind suggested by him. In London this will affect five-and six-storey flats in densely populated areas where it is quite impossible for the local authorities to provide any sort of communal shelter at all. The only way of providing shelter for these people is within the curtilage of the building itself.I suggest that that is what should be done, but it is impossible for the local authority to do it within the curtilage of the building. [Hon. Members:"Why?"] Because they have to get possession of a portion of the building,and, also, they have not control over the building. It is the owners who have control. This Clause would enable the owners to carry out the work in exactly the same way as—

11.29 p.m.

Sir J. Anderson: If this Clause were applied in that way the result would be that the whole cost of providing the shelter would fall on the tenants themselves, and in the view of the Government that would be entirely wrong. It is the policy of the Government that shelter in those cases should be provided without charge to the people concerned, and it is for that reason that, speaking on behalf of the Government, I cannot accept the suggestion that this particular paragraph should be omitted. As regards the point which the hon. Member made about local authorities, it is always possible for the local authorities, in the provision of public shelters, to designate part of any particular premises.

11.31 p.m.

Mr. Silkin: Surely the tenants are the best judges whether they are prepared to pay for the shelters. It is for them to say, by a majority. All that is being asked is that these tenants should be in a position to say, by a majority, that they want a shelter and that they require the owners to provide it. The alternative is that no shelter will be provided at all. There are many flats in the most densely populated parts of London and other large towns where, as the Lord Privy Seal knows, shelters will not be provided

except through the instrumentality of the owners. All that is being asked is that tenants should be the judges in this matter and should pay such increases of rent as the law provides. If they decide by a majority that they do not want a shelter they will do without it. Why should they be deprived of an option that is provided for people who are better off? Under our proposal they would know the cost of the shelter and the actual increase in rent.

Mr. McCorquodale: Surely it is better for these poor tenants to have their shelters provided for them, without having to pay. The hon. Gentleman has been told three times that that will be the case?

Mr. Silkin: The Lord Privy Seal knows that these tenants will be left without defence if the Clause is left as it stands. I want the Bill to give the same option to the poorer people as it gives to people better off. If the tenants can decide by a majority whether they want a scheme the matter will be entirely in their hands. I understand that the Lord Privy Seal is protecting the tenants against increases in rent. I appeal to him to give them also the protection for which I am asking.

11.34 p.m.

Sir Percy Harris: I think the House is a little confused between the experience of the Minister and that of the hon. Gentleman, who is chairman of the Housing Committee of the London County Council. They are in contact in a practical way with this problem. The interpretation of the hon. Gentleman is that tenants will suffer, while that of the right hon. Gentleman is that tenants will gain. It is a little difficult, reading the Clause, to judge between the two positions. I hope that the right hon. Gentleman will be allowed to state the position again and to assure the House that tenants will not suffer in this matter.

11.35 p.m.

Mr. Duncan: I hope that my right hon. Friend will insist on paragraph (c). I cannot understand why the hon. Member for Peckham (Mr. Silkin), who is the Chairman of the Housing Committee of the London County Council and must have enormous experience of the poorer people in London who want houses, should ask for the deletion of paragraph (c). The people who are being housed


at the present time by organisations like the Peabody Trust and other philanthropic house-building organisations are in exactly the same position as the tenants of the London County Council, and it is party to help these people, so that they do not have to pay more rent, that the paragraph is included.

11.36 p.m.

Mr. Poole: I also am in a difficulty in understanding the exact implications of the Amendment. I was surprised to hear my hon. Friend the Member for South Shields (Mr. Ede) say that we were prepared to accept paragraphs (a) and (b), but not paragraph (c). I do not see why it should be left to the discretion of the local authority whether they should or should not provide protection for the tenants of their houses. The Minister said that the local authorities had the necessary powers and, if they did the work, it would rank for grant. Knowing local authorities, and having served on them for a number of years, I want it to be compulsory on them to give the same protection to their tenants as they ask other owners of property to provide. I know that this will affect the London County Council, in particular, very hardly, and there will perhaps be considerable difficulty in finding the accommodation, but I am not prepared to agree to tenants being left at the mercy of invading aircraft in order that the local authority may be relieved of the necessary expenditure.
The Minister says it is desirable, because a burden would be imposed on the tenants and it would affect their rent, but in a block of flats such as we now see being erected it would only mean a copper or two on the weekly rental. The Minister shakes his head, but that is the result of a rough arithmetical calculation I have made. I am satisfied that the tenants would rather pay that and know that they had air-raid protection than be excused it on these grounds. If the Minister is so concerned about relieving the tenants of the responsibility of paying for this protection, why has he not done the right and proper thing and put the cost on the Exchequer, where it ought to fall, and not on the local authorities? I think that paragraph (b) should be deleted, and that it should be an obligation on local authorities to make provision for their tenants in the same way as other owners of property.

Commander Sir Archibald Southby: In my constituency there are a number of houses of a similar character to those referred to by the hon. Member for South Shields (Mr. Ede), and, as I understood the Minister's reply, he said that a tenant of one of these converted houses whose income brought him within the category of those entitled to be supplied with a shelter free would get one free, but that a tenant whose income was above the limit would not. As the hon. Member for South Shields said, there is a considerable ebb and flow of tenants in the case of these buildings, and I am wondering whAt would happen to a shelter supplied free to a certain tenant who was entitled to it by reason of the amount of his income, if he left the flat and it was subsequently tenanted by someone whose income was above the limit. Would he be entitled to use the shelter supplied to the previous tenant or not? That is a matter of considerable importance in any constituency where these converted houses house a considerable number of tenants.

11.40 p.m.

Mr. Herbert Morrison: May I first clear up the point raised by my hon. Friend the Member for Lichfield (Mr. Poole)? The reason why my hon. Friend the Member for South Shields (Mr. Ede) said that we did not object to paragraph (b) is that there is a general statutory responsibility on local authorities to provide shelter for the community, and it would not be right to single out for special statutory protection any section. If my hon. Friend thinks that the London County Council has any interest in favour of paragraph (b), perhaps I had better tell him that my hon. Friend the Member for Peckham (Mr. Silkin), as chairman of the housing committee, and I took the responsibility of incurring an expenditure of £750,000 in that direction. That is that. And the London County Council has since ratified our action. The Lord Privy Seal apparently relies in part on Clause 2, which is the designation Clause—that is to say, a local authority may enter upon and designate buildings. But it can designate buildings only for the purpose of public shelter—that means general public shelter. What is wanted in these cases, whether they be working-class flats, mixed flats, or houses built for single occupation that have become tenements,


is not general public shelter, but particular shelter for the people residing in that area or in those buildings. Therefore, Clause 2 does not fit.
In the case of tenement flats inhabited by the working classes, in most cases it will not be the building that you want to designate, but the courtyard, where the shelter would be built. So Clause 2, again, does not meet the case. But paragraph (c) specifically exempts premises occupied by the class of population eligible to receive material from His Majesty's Government without cost—that is, a steel shelter or, as the Lord Privy Seal indicated, other things which they might receive. I presume that he means bricks, cement and so on. These would not be of much use to some people. Take, for instance, the average constituents of the hon. Member for South Croydon (Sir H. Williams). I imagine they would be quite incapable of taking bricks and cement, and building shelters for themselves. In the new paragraph (a), which I think the Lord Privy Seal will recommend to the House, power is taken for the local authority to enter upon common gardens. But this does not give the local authority power to enter upon the courtyards of working-class flats. It may be necessary for them to do that. That is another gap. Ought it not to be an owner's job, at any rate in part? Ought not the local authority to have some hold over the owner? In municipal flats, the local authority is to do the job. It has to carry the responsibility.

Mr. Poole: No.

Mr. Morrison: In practice it has, and a large number are doing it.

Mr. Poole: I appreciate the explanation which the right hon. Gentleman has given me, but all local authorities are not in the same position as the London County Council.

Mr. Morrison: So long as we are clear about that, it is all right.

Mr. Poole: I am not seeking to criticise the London County Council or to make a charge against it, but I only use it as an illustration. I ask the right hon. Gentleman the Member for South Hackney (Mr. H. Morrison) to remember that the Liverpool City Council also must have many such flats, and that council is a Tory

council, and we are entitled to ask, what is going to happen in Liverpool? Can the right hon. Gentleman tell me that every Tory council which owns flats has done the same as his council has done? I am not seeking to make charges, but London, being a typical area, is the best illustration to give.

Mr. Morrison: I would not interfere in the affairs of Liverpool.

Mr. Poole: That is not necessary.

Mr. Morrison: I would not take Liverpool as a case about which to argue, but the hon. Member did make an implication.

Mr. Poole: No.

Mr. Morrison: I believe he did, but I will not pursue the matter. The point I am on here is that you are excluding a whole class from the operation of the Clause, and it is wrong to do so. There is no obligation either upon the owner of the flats or the local authority to step in and put the matter right, and you are in danger of leaving a wide gap in this matter. If the local authority wishes to step in and fill in this gap, there is no provision in the Clause whereby it can effectively do so. The Lord Privy Seal has proceeded on the basis of handling this problem of shelter according to the nature of the specific problem with which he is dealing, with the idea at the end of the day that every case will be covered and every gap will be filled in. Here is a case where he has not done this, and it is wrong that that should be so. Our case is against paragraph (c) and the words that follow, and in the circumstances we have nothing to do but to Divide against their Lordships' Amendment. I still hope that the Lord Privy Seal can do something about it, otherwise we must Divide against the Amendment.

11.48 p.m.

Mr. J. J. Davidson: I would draw the attention of the Lord Privy Seal to the fact that in Scotland, and in Glasgow in particular, we are very seriously troubled with the problem of huge flats and buildings being used to house a great many families. The latest reports on housing in Glasgow indicate that this is a growing menace, especially in the industrial areas. I would like the right hon.


Gentleman to keep in mind the fact that he is setting the local authorities a very serious problem. I lis1tened very carefully to the interchange between my hon. Friend the Member for Lichfield (Mr. Poole) and my right hon. Friend the Member for South Hackney (Mr. H. Morrison), and I believe that the House will recognise that in the London County Council we have really great men who want to tackle the job in a workmanlike manner and carry out their responsibilities to the full, but their great work does not in any way give us an estimate of the character of the work that the Lord Privy Seal himself is doing. He stated in answer to my hon. Friend that this responsibility lies with local authorities, and that if they cared to undertake this work it would rank for grant. While we recognise that places like Glasgow, London and other towns where the local authorities have Socialist majorities, are doing this work as quickly as possible, it would be interesting to have information concerning local authorities who are lagging behind. It is also of interest to note at this late hour of the Debate on Civil Defence that the Lord Privy Seal has told us that local authorities may do this or may do that. I would like him to indicate how many are lagging behind in their statutory responsibility.
With regard to paragraph (c), most of us realise that in the congested areas of Glasgow many suggestions are made, but the only practical one that can be made is that the closed mouth of the property, a small narrow way leading into a small, paved backyard, is the method of defence for the people of those huge buildings. Does the Lord Privy Seal think that that is really a practical suggestion? Can he not see any way other than by the

local authority installing huge and expensive shelters in buildings such as these? Are these people not entitled, in this income grade, to free protection? The Anderson shelter is of no use. These houses are in blocks of tenements and 30 or 40 families live in one building. There are old mansions with seven or eight families in each, in the Monteith road district of Glasgow. Paragraph (c) will materially affect the chance of those people having any kind of shelter.

I trust that the Lord Privy Seal will give the reconsideration to this question for which the hon. Member for South Croydon (Sir H. Williams) asked. I have visited Croydon recently. I met a man there who was living in a house where there were three families. When it rained very heavily the rain came in on the bottom floor. I can tell the hon. Member for South Croydon that the man also said that it was no use writing to his Member about it. Such circumstances exist in almost every big area in the country. I hope that the right hon. Gentleman will give this question his serious reconsideration as it touches Members in all parts of the House very strongly.

Mr. John Wilmot: There seems to be some misconception as to the real meaning of the Amendment, and it would be for the convenience of the House if the Lord Privy Seal were to answer the question:If the Amendment was carried and working-class people are excluded from the operation of the Clause, what form of protection will be provided for them?

Question put, "That this House doth agree with the Lords in the said Amendment."

The House divided: Ayes, 162; Noes, 108.

Division No. 226.]
AYES.
[11.55 p.m.


Aaland-Troyte, Lt.-Col. G. J.
Bull, B. B.
Crowder, J. F. E.


Adams, S. V. T. (Leeds, W.)
Butcher, H. W.
Culverwell C. T.


Allen, Col. J. Sandeman (B'knhead)
Cary, R. A.
Davies, C. (Montgomery)


Anderson, Rt. Hn. Sir J. (So'h Univ's)
Channon, H.
Denman, Hon. R. D.


Anstruther-Gray, W. J.
Chapman, A. (Rutherglen)
Denner, P. W.


Aske, Sir R. W.
Clarke, Colonel R. S. (E. Grinstead)
Dorman-Smith, Col. Rt. Hon. Sir R. H.


Beamish, Rear-Admlral T. P. H.
Clydesdale, Marquess of
Drewe, C.


Beaumont, Hon. R. E. B. (Portsm'h)
Cobb, Captain E. C. (Preston)
Dugdale, Captain T. L.


Bernays, R. H.
Colman, N. C. D.
Duncan, J. A. L.


Bossom, A. C.
Colville, Rt. Hon. John
Eastwood, J. F.


Boulton, W. W.
Cook, Sir T. R. A. M. (Norfolk N.)
Eckersley, P. T.


Bower, Comdr. R. T.
Cooke, J. D. (Hammersmith, S.)
Elliot, Rt. Hon. W. E.


Boyee, H. Leslie
Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Ellis, Sir G.


Brooke, H. (Lewisham, W.)
Craven-Ellis, W.
Elliston, Capt. G. S.


Brown, Rt. Hon. E. (Leith)
Crooke, Sir J. Smedley
Emmott, C. E. G. C.


Brown, Brig.-Gen. H. C. (Newbury)
Crookshank, Capt. Rt. Hon. H. F. C.
Emzya-Evans, P. V.




Erskine-Hill, A. G.
Llewellin, Colonel J. J.
Salt, E. W.


Fildes, Sir H.
Lloyd, G. W.
Schuster, Sir G. E.


Findlay, Sir E.
Locker-Lampson, Comdr. O. S.
Seelt, Lord William


Fleming, E. L.
Loftus, P. C.
Selley, H. R.


Fremantle, Sir F. E.
Mabane, W. (Huddersfield)
Shakespeare, G. H


Furness, S. N
McCorquodale, M. S.
Shepperson, Sir E. W.


Glyn, Major Sir R. G. C.
McEwen, Capt. J. H. F.
Smith, Bracewell (Dulwich)


Greene, W. P. C. (Worcester)
MoKie, J. H.
Smith, Sir R. W. (Aberdeen)


Gridley, Sir A. B.
Magnay, T.
Snadden, W. McN.


Grimston, R. V.
Makins, Brigadier-General Sir Ernest
Somervell, Rt. Hon. Sir Donald


Gritten, W. G. Howard
Margesson, Capt. Rt. Hon. H. D. R.
Southby, Commander Sir A. R. J.


Hacking, Rt. Hon. Sir D. H.
Markham, S. F.
Spens, W. P.


Hammersley, S. S.
Maxwell, Hon. S. A.
Strauss, H. G. (Norwich)


Hannah, I. C.
Mills, Major J. D. (New Forest)
Strickland, Captain W. F.


Hannon, Sir P. J. H.
Mitchell, H. (Brentford and Chiswlek)
Stuart, Hon. J. (Moray and Nairn)


Harbord, Sir A.
Morris-Jones, Sir Henry
Sutcliffe, H.


Haslam, Sir J. (Bolton)
Morrison, G. A. (Scottish Univ's.)
Thomson, Sir J. D. W.


Heneage, Lieut.-Colonel A. P.
Muirhead, Lt.-Col. A. J.
Thorneyoroft, G. E. P.


Hepburn, P. G. T. Buchan-
Munro, P.
Thornton-Kemsley, C. N.


Hepworth, J.
Nall, Sir J.
Titchfield, Marquess of


Hogg, Hon. Q. McG.
Nicholson, G. (Farnham)
Tulnell, Lieut.-Commander R. L.


Holdsworth, H.
O'Connor, Sir Terenoe J.
Ward, Lieut.-Col. Sir A. L. (Hull)


Holmes, J. S.
Palmer, G. E. H.
Ward, Irene M. B. (Wallsend)


Howitt, Dr. A B
Perkins, W. R. D.
Warrender, Sir V.


Hudson, Capt. A. U. M. (Hack., N.)
Pickthorn, K. W. M.
Waterhouse, Captain C.


Hunloke, H. P.
Porritt, R. W.
Watt, Lt.-Col. G. S. Harvie


Hunter, T.
Pownall, Lt.-Col. Sir Assheton
Whiteley, Major J. P. (Buckingham)


Hutohinson, G. C.
Radlord, E. A.
Wickham, Lt.-Col. E. T. R.


Inskip, Rt. Hon. Sir T. W. H.
Raikes, H. V. A. M.
Williams, H. G. (Creydon. S.)


Jarvis, Sir J. J.
Ramsbotham, Rt. Hon. H.
Willoughby de Eresby, Lord


Jones, L. (Swansea W.)
Reed, Sir H. S. (Aylesbury)
Womersley, Sir W. J.


Kerr, Sir John Graham (Sco'sh Univs.)
Field, W. Allan (Derby)
Wood, Hon. C. I. C.


Kimball, L.
Riekards G.W. (Skipton)
Wragg, H.


Lamb, Sir J. Q.
Ropner, Colonel L.
Wright, Wing-Commander J. A. C.


Lancaster, Lieut.-Colonel C. G.
Ross Taylor, W. (Woodbridge)
Young, A. S. L. (Partick)


Law, R. K. (Hull, S.W.)
Rowlands, G.



Leech, Sir J. W.
Royds, Admiral Sir P. M. R.
TELLERS FOR THE AYES.—


Lennox-Boyd, A. T. L.
Ruggles-Brise, Colonel Sir E. A.
Lieut -Colonel Kerr and Major


Lipson, D. L.
Salmon, Sir I.
Sir James Edmondson.




NOES.


Adams, D. (Consett)
Guest, Dr. L. H. (Islington, N.)
Pethick-Lawrence, Rt. Hon. F. W.


Adams, D. M. (Poplar, S.)
Hall. G. H. (Aberdare)
Pools, C. C.


Adamson, Jennie L. (Dartford)
Hall, J. H. (Whitechapel)
Price, M. P.


Alexander, Rt. Hon A.V(H'lsbr)
Harris, Sir P. A.
Richards, R. (Wrexham)


Ammon, C. G.
Hayday, A.
Ridley, G.


Anderson, F. (Whitehaven)
Henderson, A. (Kingswinford)
Ritson, J.


Barr, J.
Henderson, J. (Ardwick)
Robinson, W. A. (SI. Helens)


Bellenger, F. J.
Hills, A. (Pontafract)
Rothschild, J. A. de


Benn, Rt. Hon. W. W
Hopkin, D.
Seely, Sir H. M.


Benson, G.
Isaacs, G. A.
Sexton, T. M.


Bevan, A.
Jagger, J.
Silkin, L.


Buchanan, G.
Jenkins, A. (Pontypool)
Silverman, S. S.


Burke, W. A
Jenkins, Sir W. (Neath)
Smith, Ben (Rotherhithe)


Cape, T.
Jones, Sir H. Haydn (Merionsth)
Smith, E. (Stoke)


Cluse, W. S.
Kennedy, Rt. Hon. T.
Smith, T. (Normanion)


Collindrldge, F.
Kirby, B. V.
Sorensen, R. W.


Cove, W. G.
Lawson, J. J.
Stephen, C.


Cripps, Hon. Sir Stafford
Leach, W.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Daggar, G.
Logan, D. G.
Taylor, R. J. (Merpeth)


Dalton, H.
Lunn, W.
Tll.ker, J. J.


Davidson, J. J. (Maryhill)
Maedonald, G. (Ince)
Viant, S. P.


Davies, S. O. (Merthyr)

McEntee, V. La T.
Watkins. F. C.


Dobbie, W.
McGhee, H. G.
Watson, W. McL.


Dunn, E. (Rather Valley)
Maclean, N.
Welsh, J. C.


Ede, J. C.
Mainwaring, W. H.
Westwood, J.


Edwards, Sir C. (Bedwellty)
Marshalt, F.
White, H. Graham


Edwards, N. (Caerphilly)
Maxton, J.
Whiteley, W. (Blaydon)


Fletcher, Lt.-Comdr. R. T. H.
Messer, F.
Wilkinson, Ellen


Frankel, D.
Milner, Major J.
Williams, E. J. (Ogmore)


Gallacher, W.
Morgan, J. (York, W.R., Doneaster)
Williams, T. (Don Valley)


Garro Jones, G. M.
Morrison, Rt. Hon. H. (Hackney, S.)
Wilmot, John


Gibson, R. (Greenock
Morrison, R. C. (Tottenham, N.)
Windsor, W. (Hull, C.)


Green, W. H. (Deptford)
Noel-Baker, P. J.
Woods, G. S. (Finsbury)


Grenfell, D. R.
Oliver, G. H.
Young, Sir R. (Newton)


Griffith, F. Kingsley (M'ddl'sbro, W.)
Paling, W.



Griffiths, G. A. (Hemswerth)
Parker, J.
TELLERS FOR THE NOES.—


Groves, T. E.
Pearson, A.
Mr. Mathers and Mr. Anderson


Question, "That this House doth agree with the Lords in the said Amendment,"put, and agreed to.

Lords Amendment: In page 32, line 33, at the end, insert:
exclusive of compensation;
(c) state whether any and if so what compensation is proposed to be paid by the owner to persons having an estate or interest in the premises in which the shelter is to be provided and whether, and if so what, compensation is proposed to be allowed to the owner in respect of his interest in the premises in which the shelter is to be provided.

12.3 a.m.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment is concerned with machinery. Its purpose is to provide, where a Scheme devised by an owner of a block of flats involves the setting apart of a portion of a building which may be in occupation by a tenant or in the occupation of the owner himself, that the loss suffered by the tenant or the owner, as the case may be, through the arrangement for using such accommodation for the purpose of shelter may be included in the compensation to be recovered by way of increased rent from the tenants in general.

12.4a.m.

Dr. Guest: This matter requires a little more explanation. The right hon. Gentleman in a previous Amendment said that the Clause applied to a limited number of cases. I think that is quite inaccurate; it will apply to a very large number of people. I do not know what proportion of people in London are above the level of those entitled to the Anderson shelter who are living in divided houses, but it isvery large. You will find them in Mayfair, in Bloomsbury, in every part of London and in many provincial towns. There must be a very large number who are above the Anderson shelter limit. The Amendment provides that a sum of money shall be paid to compensate the owner or tenant for giving up certain premises for the purposes of an air-raid shelter, but there is no means of compelling the owner or tenant to give up the premises if he does not wish to do so. You will be able to offer to pay money, but you will not be able to compel an individual to allow you to make a shelter. There appears to be a good deal of obscurity about this point, and as was shown clearly on the previous Amendment we discussed, there is a great deal of obscurity about the Clause. I do not

raise this matter in a controversial spirit, but I want to know what the Amendment means, and to be sure that it is not too defective to work.

12.6 a.m.

Mr. Silkin: Will the Minister explain a further matter? There may be cases where the owner is himself in occupation of that part of the premises which it is proposed to use as an air-raid shelter. In that case, the owner would have to give up possession and would claim to be compensated. As far as I can see, he could claim any figure he liked, and there would be no way of checking him. All he would have to do would be to insist on the amount of compensation he claimed. He would be the sole judge. It might conceivably arise that the owner would claim such a large amount of compensation that it would make the whole scheme financially impracticable. I should like the Lord Privy Seal to explain what check there is on an improper claim on the part of an owner for the accommodation which he has to give up.

12.7 a.m.

Sir J. Anderson: I speak again by leave of the House. In regard to the point made by the hon. Member for North Islington (Dr. Guest), in Sub-section 9 it is made quite clear that there is no power on the part of the owner to enter any part of the premises against the will of the tenant. That matter was discussed at an earlier stage. The Government were criticised for not providing some power to compel a tenant to abate his rights in order that shelter might be provided for all the occupants of the building in the portion of the premises in his occupation. I suggest that that does not arise on this Amendment. The effect of the Amendment is that where, in fact, the owner sees his way to provide shelter, whether in a portion of the premises which happens for the time being to be untenanted, or by an agreement with the tenant, or by setting apart a portion of the premises in his own occupation, then a sum representing the loss to the person concerned due to that appropriation for shelter purposes of a portion of the premises in his occupation may be added to the amount to be recovered in due course by increased rent. There is no safeguard provided in the Clause against an extravagant claim by the owner. That is true. On the other hand, the operation of the Clause is en-


tirely dependent on good relations between the tenants and the landlord and the willingness of the landlord to bestir himself and, taking advantage of the machinery provided by the Clause, to set about providing shelter under a scheme which the majority of the tenants are prepared to put through.

Sir Stafford Cripps: On Clause 69 there is a Lords Amendment which makes it clear that compensation in these cases is now covered by the Clause.

Sir J. Anderson: I was dealing with the Clause as it left this House.

Dr. Guest: If the right hon. Gentleman's argument is correct, it would mean that in certain cases where there was not any accommodation vacant, or in the possession of the landlord himself, there is no means of securing that there shall be an air-raid shelter provided in the class of property dealt with. That is what we want to get clear, because we think such means should be provided in some way, as the Clause applies to a very large number of people throughout the country and not only in London.

Lords Amendment: In page 33, line 3, leave out from the beginning to "dissent," in line 4.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
Under the original permissive form of the Clause the owner was not allowed a vote in respect of any premises which might be in his own occupation. Now that the Clause is compulsory it has been suggested that it would be only reasonable that the owner, in common with the tenant, should have a vote should he himself occupy part of the premises. The effect of omitting these words is to give the owner a vote.

12.15 a.m.

Mr. Silverman: I should like the right hon. Gentleman to say whether, for the purpose of the Amendment, "occupation" means actual physical occupation or occupation in a purely notional, legal sense. I think everyone would appre-

ciate that, if the owner is himself an actual, physical tenant, he would be a perfectly proper person to take part in such a vote as is necessary to put this machinery into operation. But suppose he does not actually live there and leaves part of it unoccupied. That might conceivably give him a controlling voice and nullify the whole purpose of the Clause, so as to make it impossible for the others to get a majority. Can the right hon. Gentleman say whether purely legal occupation is intended by "occupation," or only physical occupation?

Sir J. Anderson: I am advised that "occupation" here means occupation in the legal sense.

Mr. Davidson: Does the Clause mean that an owner can have friends in, occupying his own part of the premises in his name, or must he himself be resident there?

Mr. Silverman: I hope we shall get some better answer from the right hon. Gentleman than we have had up to now. If purely legal occupation and not actual, physical occupation is intended, would it not have this result, that where a large block of flats was half empty, this Clause could conceivably have no effect at all?

12.18 a.m.

Sir S. Cripps: I think the right hon. Gentleman has forgotten the definition of "occupier" in the Bill, on page 76, as follows:
 'Occupier,' in relation to any unoccupied land, premises, building, or part of a building, means the person entitled to the possession thereof.
That is not the legal definition, because unoccupied land has no occupier. It is an artificial definition, created for the purpose of this Act, and that is why it is put in the definition Clause, so that in the case which my hon. Friends have put, the owner would in fact be dealt with as the occupier of all the unoccupied part of the premises, and he could in that case out-vote all the people actually living on the premises. In such a case, although he had no personal danger, because he was not actually living there, and it did not matter to him two pins whether or not there was an air-raid shelter in the building, he would have as many votes as all the people who actually had to live there, and he, though not risking the dan-


ger, could say, "I do not wish to have an air-raid shelter," because it would cost him money or for any other reason. That does not seem to be a very desirable state of affairs.

Question put, "That this House doth agree with the Lords in the said Amendment."

"The House divided: Ayes, 133; Noes, 81.

Division No. 227.]
AYES.
[12.20 a.m.


Adams, S. V. T. (Leeds, W.)
Hacking, Rt. Hon. Sir D. H.
Raikes, H. V. A. M.


Allen, Col. J. Sandeman (B'knhead)
Hammersley, S. S.
Ramsbotham, Rt. Hon. H.


Anderson, Rt. Hn, Sir J. (Sc'h Univ's)
Hannah, I. C.
Rankin, Sir R.


Anstruther-Gray, W. J.
Harbord, Sir A.
Reed, Sir H. S. (Aylesbury)


Aske, Sir R. W.
Haneage, Lieul.-Colonel A. P.
Reid, W. Allan (Derby)


Beaumont, Hon. R. E. B. (Portsm'h)
Hepburn, P. G. T. Buchan-
Ropner, Colonel L.


Bernays, R. H.
Hepworth, J.
Ross Taylor, W. (Woodbridge)


Bossom, A. G.
Holdsworth, H.
Rowlands, G.


Boulton, W. W.
Holmes, J. S.
Royds, Admiral Sir P. M. R.


Bower, Comdr. R. T.
Howitt, Dr. A. B.
Salmon, Sir I.


Boyce, H. Leslie
Hudson, Capt. A. U. M. (Haok., N.)
Salt, E. W.


Brooke, H. (Lewisham, W.)
Hunloke, H. P.
Schuster, Sir G. E.


Bull, B. B.
Hunter, T.
Scott, Lord William


Bullock, Capt. M.
Hutohinson, G. C.
Shakespeare, G. H.


Butcher, H. W.
Inskip, Rt. Hon. Sir T. W. H.
Shepperson, Sir E. W.


Cary, R. A.
Jarvis, Sir J. J.
Smith, Sir R. W. (Aberdeen)


Chapman, A. (Rutherglen)
Jones, L. (Swansea W.)
Snadden, W. McN.


Clarke, Colonel R. S. (E. Grinstead)
Kerr, Colonel C. I. (Montrose)
Somervell, Rt. Hon. Sir Donald


Clydesdale, Marquess of
Kerr, Sir John Graham (Soo'sh Univs.)
Southby, Commander Sir A. R. J.


Cobb, Captain E. C. (Preiton)
Lamb, Sir J. Q.
Spens, W. P.


Colman, N. C. D
Lancaster, Lieut.-Colonel C. G.
Strauss, H. G. (Norwich)


Colville, Rt. Hon. John
Leech, Sir J. W.
Strickland, Captain W. F.


Cook, Sir T. R. A. M. (Norfolk, N.)
Llewellin, Colonel J. J.
Stuart, Rt. Hon. J. (Moray and Nairn)


Cooke, J. D. (Hammersmith, S.)
Lloyd, G. W.
Sutoliffe, H.


Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Locker-Lampson, Comdr. O. S.
Thomson, Sir J. D. W.


Craven-Ellis, W.
Loftus, P. C.
Thorneycroft, G. E. P.


Crookshank, Capt. Rt. Hon. H. F. C.
MeCorquodale, M. S.
Thornton-Kemsley, C. N.


Culverwell, C. T.
MoEwen, Capt. J. H. F.
Titchfield, Marquess of


Davies, C. (Montgomery)
MoKie, J. H.
Tufned, Lieut.-Commander R. L.


Dorman-Smith, Col. Rt. Hon. Sir R. H.
Magnay, T.
Ward, Lieut.-Col Sir A. L. (Hull)


Drewe, C.
Margasson. Capt. Rt. Hon. H. D. R.
Ward, Irene M. B. (Wallsend)


Duggan, H. J.
Markham, S. F.
Waterhouse, Captain C.


Duncan, J. A. L.
Maxwell, Hon. S. A.
Watt, Lt.-Col. G. S. Harvie


Eastwood, J. F.
Mills, Major J. O. (New Forest)
Whiteley, Major J. P. (Buckingham)


Ecksrsley P. T.
Mitchell, H. (Brentford and Chiswick)
Wickham, Lt.-Col. E. T. R.


Elliot, Rt. Hon. W. E.
Morris-Jones, Sir Henry
Williams, Sir H. G. (Croydon, S.)


Ellis, Sir G.
Morrison, G. A. (Soottish Univ's.)
Willoughby de Eresby, Lord


Erskine-Hill, A. G.
Muirhead, Lt.-Col. A. J.
Womersley, Sir W. J.


Fildes, Sir H.
Munro, P.
Wood, Hon. C. I. C.


Findlay, Sir E.
Nail, Sir J.
Wragg, H.


Fleming, E. L.
O'Connor, Sir Terenee J.
Wright, Wing-Commander J. A. C.


Fremantle, Sir F. E.
Palmer, G. E. H.



Furness, S. N.
Perkins, W. R. D.
TELLERS FOR THE AYES.—


Green, W. P. C. (Worcester)
Piokthorn, K. W. M.
Captain Dugdale and Major


Gridley, Sir A. B.
Pownall, Lt.-Col. Sir Assheton
Sir James Edmondson.


Grimston, R. V.
Radford, E. A.





  NOES.


Adamson, Jennie L. (Dartford)
Grenfell, D. R.
Price, M. P.


Adamson, W. M.
Guest, Dr. L. H. (Islington, N.)
Pritt, D. N.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Hall. G. H. (Aberdare)
Ridley, G.


Ammon, C. G.
Hall, J. H. (Whiteohapel)
Ritson, J.


Barr, J.
Hayday, A.
Robinson, W. A. (St. Helens)


Benn, Rt. Hon. W. W.
Hills, A. (Pontefraot)
Rothsohild, J. A. de


Benson, G.
Isaacs, G. A.
Seely, Sir H. M.


Bevan, A.
Jagger, J.
Sextan, T. M.


Buchanan, G.
Jenkins, A. (Pontypool)
Silkin, L.


Burke, W. A.
Jones, Sir H. Haydn (Merioneth)
Silverman, S. S.


Collindridge, F.
Kennedy, Rt. Hon. T.
Smith, Ben (Rotherhithe)


Cove, W. G.
Kirby, B. V.
Smith, E. (Stoke)


Cripps, Hon. Sir Stafford
Lawson, J. J.
Sorensen, R. W.


Daggar, G.
Leach, W.
Stephen, C.


Dalton, H.
Logan, D. G.
Stewart, W. J. (H'ght'n-le-Sp'ng)-


Davidson, J. J. (Maryhill)
Maodonald, G. (Ince)
Taylor, R. J. (Morpeth)


Davies, S. O. (Merthyr)
McEntee, V. La T.
Tinker, J. J.


Dobbie, W.
Mainwaring, W. H.
Watkins, F. C.


Dunn, E. (Rother Valley)
Marshall, F.
Watson, W. McL.


Ede, J. C.
Maxton, J.
Westwood, J.


Edwards, Sir C. (Bedwellty)
Messer, F.
Wilkinson, Ellen


Edwards, N. (Caerphilly)
Milner, Major J.
Williams, E. J. (Ogmore)


Fletcher, Lt.-Comdr. R. T. H.
Morgan, J. (York, W.R., Donoaster)
Wilmot, John


Frankel, D.
Morrison, Rt. Hon. H. (Hackney, S.)
Woods, G. S. (Finsbury)


Gallacher, W.
Noel-Baker, P. J.
Young, Sir R. (Newton)


Garro Jones, G. M.
Parker, J.



Gibson, R. (Greenock)
Pethick-Lawrence, Rt. Hon. F. W.
TELLERS FOR THE NOES.—


Greenwood, Rt. Hon. A.
Poole, C. C.
Mr. Mathers and Mr. Anderson.

Subsequent Lords Amendment in page 33, line 5, agreed to.

Lords Amendment: In page 33, leave out lines 14 to 19.

12.27 a.m.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is not much more than a drafting Amendment. The words proposed to be left out had to be inserted in a different place, because the reference to "owners" appears only once in the Clause and now appears twice. That is the whole purpose of the change,

Question put, and agreed to.

Subsequent Lords Amendment in page 33, line 22, agreed to.

Lords Amendment: In page 33, line 24, at the end, insert:
(b) there shall then be added to the sum ascertained under paragraph (a) of this Subsection the amount, if any, proposed by the scheme as compensation to persons (including the owner) interested in the premises in which the shelter is situated, or the amount (if any) properly paid by, or, as the case may be, reasonably allowed to, the owner in respect of such compensation, whichever is the less.

Sir J. Anderson: I beg to move, as an Amendment to the Lords Amendment, in line 2, to leave out from the word "scheme," to the end of the Lords Amendment, and to add:
to be paid by the owner as compensation to persons having an estate or interest in the premises in which the shelter is to be provided or the amount, if any, properly paid by the owner in respect of such compensation, whichever is the less; and
(ii) the amount, if any, proposed by the scheme to be allowed as compensation to the owner in respect of his interest in the premises in which the shelter is to be provided or the amount reasonably allowed to the owner in respect of such compensation, whichever is the less.
The Lords Amendment is in a form which it has been suggested is somewhat obscure, and I propose that it should be amended in terms which will make the Amendment read:
(b) there shall then be added to the sum ascertained under paragraph (a) of this Subsection the amount, if any, proposed by the scheme to be paid by tie owner as compensation to persons having an estate or interest in the premises in which the shelter is to be provided, or the amount, if any, properly paid by the owner in respect of such compensation, whichever is the less, and

(ii) the amount, if any, proposed by the scheme to be allowed as compensation to the owner in respect of his interest in the premises in which the shelter is to be provided or the amount reasonably allowed to the owner in respect of such compensation, whichever is the less.
That alteration of wording makes no difference to the sense, or the meaning which it was intended to convey, and is a good deal easier to construe. The effect of the Amendment made in another place, the wording of which I suggest should be somewhat modified, is this: As already explained, there shall be included in the sum which is to be recoverable by way of increased rent either an amount included in the estimate originally furnished by the owner as the sum to be paid in compensation to an occupier whose premises are being used for the purpose of providing shelter, or the amount actually paid to such person, whichever is the less, where the interest of an occupier is affected, or, alternatively, where the interest of the owner is affected then the sum recovered is either the amount included in the original estimate or the amount ultimately allowed to the owner, again, whichever is the less. The matter is complicated. That ensures that the owner shall not recover more than he represented to the tenants in his original estimate would be recoverable under a particular head, or more than, in fact, has proved to be recoverable, whichever is the less.

12.32 a.m.

Sir S. Cripps: I think the House may be satisfied with the words which the Lord Privy Seal has moved to be substituted for the very difficult words which their lordships seemed to think would be adequate. May I put this in explanation of what the meaning of the Amendment is? If I may take an example I think it may be made fairly clear. Suppose, in a block of flats, a scheme is put forward by which the bottom flat is to be taken for the purpose of an air-raid shelter or a portion of it, and as a result of that the rent of that bottom flat is to be reduced, let us say from £100 to £50. The landlord will suffer the loss of £50 rent because in future he will get only £50 instead of £100. The tenant will suffer some loss due to inconvenience through having to move out of the flat while the air-raid shelter is being built. That might be assessed at £50. The air-raid shelter itself will cost, say, £500


to build. The scheme would then be: cost of building air-raid shelter, £500; compensation to be paid to the tenant, £50; compensation to be allowed to the landlord, £50 a year for eight years, £400. total £950.
That would be the scheme. If there were a dispute as to the justice of the £50 or the £400 to be paid to the tenant or the landlord, under Section 69 that can be taken before the Official Arbitrator and he may fix the figure of £300 to be paid to the landlord and £25 to the tenant. Then the only figure which can be ultimately charged in the calculation of the increase of rent would be the £300, and not the £400, or the £25 and not the £50. If, on the other hand, he awarded £500 to the landlord —more than actually in the scheme —the landlord could not recover more than had been in the scheme, because that was what he had put forward in his compensation to the tenants in order to get their acceptance of the scheme. This amended paragraph (b) makes it quite clear that both as regards what has to be paid to the tenant and what has to be paid to the landlord, it will only be the smaller of the two sums, either that which was in the original scheme or that which was ultimately awarded as reasonably payable under Clause 69.

Amendment to Lords Amendment agreed to.

Lords Amendment, as amended, agreed to.

Subsequent Lords Amendment in page 33, line 32, agreed to.

Lords Amendment: In page 33, line 35, leave out "one-tenth" and insert "one-eighth."

12.39 a.m.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is a substantive Amendment which alters the relationship of the owners and the tenants as regards the recovery of the cost of providing shelters. In the Clause as it left this House it was provided that one-tenth of the cost to the owner of the provision of shelters should be recoverable from the tenants by way of increased rent in different years. The effect of the Amendment is to provide that the amount recoverable in each of the 10 years shall be not one-tenth but one-eighth, and the

object is to limit the loss which, under the Clause as it stood before, the owner might be put to in the provision of shelter. Such loss is liable to arise in two ways. In the first place, the owner would find himself, in the normal case, under an obligation to pay Income Tax under Schedule A in respect of the increase of rent to which he has to look for the recovery of his charges.
In the second place the machinery of the Clause makes no provision for the recovery of interest on the capital outlay incurred by an owner in the provision of shelters. If, for example, he had borrowed money from the bank in order to provide the shelter the sums which might have to be paid by way of interest on such a loan would represent actual out-of-pocket losses. In addition, he would be liable to the risk of loss in respect of any vacancies in the tenancies of his property. Therefore it was proposed in another place that in order that the owner might not have financial inducement against, or at any rate not be subject to a definite financial deterrent in, the provision of shelter, he should be enabled to recover a sum exceeding the amount of his outlay, but not exceeding that amount to the extent sufficient fully to recoup him for all the loss he might be liable to incur. It has been calculated that the additional sum which in the most favourable circumstances an owner would be in a position to recover as a result of this Amendment would do no more than meet his liability to Income Tax under Schedule A and leave him with a very small sum amounting to, possibly, one-fifth of 1 per cent. as interest on his capital outlay.
It appears to the Government that, from the point of view of ensuring that advantage shall be taken of this Clause, and that it should be made to work in as great a proportion of cases as possible, there is a good deal to be said for the principle of this Amendment, and I, therefore, propose that this House should agree, with the Lords in the Amendment.

12.41 a.m.

Mr. H. Morrison: The point here is very clear and I am going to ask my hon. Friends on this side to divide against this Amendment. The Clause proposed that one-tenth of the cost should be charged annually over a period of 10 years and it is now proposed that one-eighth shall be


charged, still over a period of 10 years. That means that the owner would get his capital and expenditure back, and not merely back, but would get it back one and a quarter times over the period. I am not clear about the Income Tax point at all. I should have thought that the owner would get an allowance on Income Tax because of the additional expenditure in the upkeep of buildings, and that therefore that is an irrelevant consideration. But, apart from that, it may well be that because the shelter is there, for any subsequent lettings he will get higher rents. That is the real additional probable income point for the owner himself.
The other point was that he had to earn interest on it, and must have compensation for, possibly, empty flats in the building. We do not agree. When this work has been done the cost is to be passed on in any case to the tenant in full, that is to say, the actual capital expenditure is to be recovered from the tenants. The tenants have, therefore, got to pay the additional rent in order that this shelter may come to them. They have to pay and to pay more than was formerly the case. If the tenant is to make a sacrifice in order that the shelter may be provided, is it not right that the owner of the buildings should also make his contribution by way of sacrifice in order that the shelter may be provided for the estate, including, possibly, the place where he himself wants to live? At any rate, it is right that the owner as well as the tenants should make a contribution and this seems to be the Government's prejudice in favour of the owner against the tenant, that somehow or other the owner must not be mulcted in any charge at all. We do not agree. We say that it is reasonable that the owner of these great blocks of flats for the middle classes and others should make some sacrifice for the interest of the tenants from whom, after all, he is going to draw an increased rent.
It seems to me that the Government, with their bias against the tenant and in favour of the owner —a bias which is shared by another place —is a bias which is unreasonable and improper in the circumstances. I would remind the Lord Privy Seal that in the Committee stage of the Bill in this House an Amendment was moved by hon. Members opposite in favour of one-seventh being put on the

rent over a period of seven years. That was a much milder Amendment. It meant that the owner got his money back more quickly than would have been the case under the 10 years' proposal, but he would have got only one-seventh over a period of seven years. That milder Amendment was resisted by the Lord Privy Seal, who thought it was wrong, but directly he finds his Bill dealt with at the other end of the corridor he collapses in the face of the pressure promoted by landlords and property-owning interests of this sort. We think it is quite wrong for him to collapse in that way. We must resist this Amendment, which is against the interests of the tenants, and, therefore, we are going to divide the House upon it.

12.47 a.m.

Mr. Gallacher: I want to offer very strong objection to the proposed Amendment. As a matter of fact, I intended to oppose the Clause dealing with the liabilities that were being put on the tenant in the previous Amendment, but the very lucid explanation of that Amendment given by the hon. and learned Member for East Bristol (Sir S. Cripps) hypnotised the House, and before I got a chance of getting up to express my opinion, the Amendment was put. I want to suggest that it is quite wrong to say that the tenant shall have to pay for the cost of these shelters and especially, as in this Amendment, that they should have to pay for the cost and a quarter over the cost. In the days that lie ahead any property that will let will have to be in such a condition that it will provide air-raid shelters for the people who are going to occupy it. The property will then have this advantage over those that have not got such shelters. Why is it, if the landlord is to be put in the position where he has to remodel his property in order that it may be in a more suitable condition for letting, that the unfortunate tenant should have to pay for that remodelling? Why that should be I cannot for the life of me understand. You might just as well say that if an employer has the responsibility of erecting a shelter for his employes he should be allowed to deduct the cost of that shelter from their wages. The one thing would be as sensible as the other. The employer has to provide shelter for his employes and the landlords have the responsibility, or should have the re-


sponsibility, along with the local authorities, of putting the buildings in proper order and of meeting the ordinary needs of the tenants and the special needs that would arise in the event of air raids. They should be responsible for meeting the cost of that and not only for meeting the cost but they should be under liabilities that might arise for meeting the compensation to the sub-tenant. That landlords should be able to come along and receive one and a quarter times the cost is a scandal.
I do not believe any hon. Member on the other side of the House —I am certain there is not one —would go to his constituency and support or try to justify proposals of this kind. But I am certain that it is not only the working class, but the ordinary middle class who would also be seriously affected. I do not think any hon. Member could honestly support the Lords Amendment. The landlords are represented in another place and they will also see that the landlords' interests are always given consideration. In the next day or two there will be a publication that will be a terrible exposure of what goes on in another place and this Amendment is indicative of what that book will tell. I hope that not only on this side of the House but on the other side there will be many who will have the decency to vote against the Amendment.

12.50 a.m.

Mr. Silkin: The Minister has given three reasons as justification for asking the House to support this Lords Amendment. The first is that Income Tax under Schedule A will be increased by an increase of rent. I submit that that is not necessarily so. An increase in Income Tax does not automatically follow an increase in rent. There has to be a fresh assessment and unless the assessment is increased and it is shown that the rental value has permanently increased as a result of the protection, there will be no justification for an increase in assessment. If, on the other hand, it is shown that the rental value has permanently increased as a result of the protection, then the landlord has already full value for his protection by a permanent increase in his rent.
Secondly, the Minister is suggesting that the landlord will somehow suffer loss of rent, but he has given no justification for that statement at all. I cannot under-

stand in what way there will be loss of rent. On the contrary, it seems to me that there will be a gain of rent in many places. There are large numbers of blocks of flats which have basement premises which are at present unlet. and under the Amendment which we have just passed it will be possible for the owner to claim as compensation the rents of those empty basement flats if he uses them for the purposes of shelter, they being in his occupation. Consequently. he will actually be the gainer by being able to charge for the rent of the flats which he has not been able to Jet. But the Lord Privy Seal is going to the extreme and saying that there will be empty flats as a result of this protection being given, and I cannot follow him.
Finally, the Minister says that the landlord is entitled to interest on his money. But surely the landlord is to get a very big interest on his money if this increased rent which he charges will become a permanent increase of rent. It will go on long after the ten years. Therefore, he is to get full value for the expenditure and his interest will be very large indeed if you capitalise the increased rent which he is going to charge. I should have thought that would be ample to compensate him. Therefore, I think the case which the Minister has submitted falls on all three grounds which he has given, and I hope the House will Divide on this amendment.

12.54 a.m.

Sir S. Cripps: Where, in such cases as I gave in illustration, the rent has been increased, quite clearly in the new valuation there will be a less onus of Income Tax. At the same time, under the provisions of the Rating and Valuation (Air-Raid Works) Act, which was applied to this type of building especially, by a new Clause inserted by the Lords, the extra rent will not fall to be dealt with by Income Tax at all, and it will not come into the valuation for the purposes of Income Tax. Therefore, the landlord will, in fact, be getting a benefit, because he will be rated on the reduction, he will pay no Income Tax on the reduction; he will not have to pay Income Tax on the compensation, and, therefore, he will, in fact, benefit so far as the Income Tax and will not suffer. And at the end of eight years he will be provided with an


air-raid shelter at the expense of his tenants which will be his in perpetuity, and if the present Government go on it will surely be of great value in eight years' time, because nothing will have been done to make the danger any less.
Apart from that, the shelter can be used for many other purposes. A sensible landlord can make it usable for a swimming bath. Such a thing has been done in many places abroad. He will have those premises the value of which has been paid for by his tenants, and the Lord Privy Seal has allowed nothing for that increase in value at all. In fact, the landlord would do quite well out of this as a commercial proposition. He would do well as a profiteer out of providing this air-raid shelter. I suggest that the Lord Privy Seal might on this matter give way to the demands on this side of the House, because this is a matter in which, if he thinks there would be a small burden on the landlord, it is one which he should be asked to share and not to put the burden wholly on the tenant. Will not the Lord Privy Seal say in this case that he will advise the House not to accept the Amendment but leave the matter where it was before it went to another place?

12.57 a.m.

Sir J. Anderson: With the permission of the House, the ground on which I suggest the House might accept the Amendment is that I believe in practice it will have effect of sharing the burden between landlord and tenant. As regards the Income Tax point, I believe that in practice landlords who make a claim on the Inland Revenue for allowance in respect of basement flats have always to set against any such claim any incidental increases of rent, and I have been advised —because I made a special inquiry on this point —that in the normal case the increase of rent that will be payable in respect of a shelter will be fully taken into account by the Inland Revenue authorities as a matter of practice. I would only like to add that I hope hon. Members will recognise that, although when the Clause left this House it was cast in the form of a compulsory provision, there is in fact no effective machinery provided for requiring owners to carry the obligation that it has been sought to put upon them. That was

made clear in the discussions of the Clause. I can only hope that the hon. and learned Member for East Bristol (Sir S. Cripps) may be right in thinking that the Clause in its new form will prove highly attractive to owners of fiats. If that proves to be the case —I am doubtful about it —we shall find owners competing with one another to provide as speedily as possible the shelters we all wish to see provided for their tenants.
I am going to remind hon. Members of the argument put forward —I think with little justification —in regard to the charges which might have to be borne by the occupants of working-class flats, and that was that the charges these people would have to pay would be very small. That argument applies here. The additional charges would be very small, but there would be a cumulative effect on the owner of having to bear the cost while being able only to recover his actual outgoings without any allowance for vacant flats and liabilities for Income Tax; and I would only say that the possible financial consequences in to years' time for the owner who has had to provide shelter is a highly speculative matter, and I doubt whether owners would be very highly influenced by considerations of that sort.

1.2 a.m.

Mr. Silverman: I hope the Lord Privy Seal will not leave his argument entirely until he has dealt with a further point. We were dealing just now with the position of the owner of premises who was in occupation of part of the premises, and, apparently, we have now reached this position that, if the part of the premises of which he is an occupier as well as an owner be empty, he will be entitled to vote on equal terms with those who live there against the provision of a scheme; whereas, if he lives upon the premises himself then he is entitled to vote for the provision of a shelter which will not really cost him anything, but out of which he himself will make a profit. Really it will be very difficult to justify a proposition of this kind except on the basis laid down in another place that in no circumstances can the landlords lose anything by it.

1.3 a.m.

Mr. Davidson: I would ask the Lord Privy Seal to depart from the attitude that whatever the Opposition may say


or whatever suggestion they may make is something that just must be said, and that in the final resort he has his majority behind him. I want to show to the Lord Privy Seal his inconsistency in argument here to-night and how completely weak his position is. In the first place, when the hon. and learned Member for East Bristol (Sir S. Cripps) had put forward an argument that this would be something that would attract these owners and they would be induced, therefore, to undertake the building of these precautions, then he says he hesitates himself, and does not think it is so and then he is asking us to accept an Amendment that he does not believe will attract these owners to carry out their responsibilities as owners of property. I want to know

which of these he is going to choose. It has been proved quite clearly that these owners will only carry out the responsibilities of national defence for the price he is prepared to pay. This Clause is an indication that the Lord Privy Seal has given himself over hook, line and sinker to those in this country who are demanding payment for National Service. There is one thing certain, and that is that his friends the owners are demanding more than their fair share, and that the burden of National Defence should be placed on other shoulders.

Question put, "That this House doth agree with the Lords in the said Amendment."

The House divided: Ayes, 126; Noes, 79.

Division No. 228.]
AYES.
[1.7 a.m.


Adams, S. V. T. (Leeds, W.)
Greene, W. P. C. (Worcestar)
Raikes, H. V. A. M.


Allen, Col. J. Sandeman (B'knhead)
Gridley, Sir A. B.
Ratmbotham, Rt. Hon. H.


Anderson. Rt. Hn. Sir J. (Sc'h Univ's)
Grimston, R. V.
Rankin, Sir R.


Anstruther-Gray, W. J.
Hacking, Rt. Hon. Sir D. H.
Reed, Sir H. S. (Aylesbury)


Aske, Sir R. W.
Hammersley, S. S.
Reid, W. Allan (Derby)


Beaumont, Hon. R. E. B. (Portsm'h)
Hannah, I. C.
Ropner, Colonel L.


Bernays, R. H.
Harbord, Sir A.
Rosa Taylor, W. (Woodbridge)


Bossom, A. C.
Heneage, Liaut.-Colonel A. P.
Rowlands, G.


Boulton, W. W.
Hepburn, P. G. T. Buchan-
Royds, Admiral Sir P. M. R.


Bowsr, Comdr. R. T.
Hepworth, J.
Salmon, Sir I.


Boyce, H. Leslie
Holdsworth, H.
Salt, E. W.


Brooks, H. (Lewisham, W.)
Holmes, J. S.
Scott, Lord William


Bull, B. B.
Howltt, Dr. A. B.
Shepperson, Sir E. W.


Bullock, Capt. M.
Huntoke, H. P.
Smith, Sir R. W. (Aberdeen)


Butcher, H. W.
Hunter, T.
Snadden, W. McN.


Cary, R. A.
Hutehinson, G. C.
Somervell, Rt. Hon. Sir Donald


Chapman, A. (Rutherglen)
Inskip, Rt. Hon. Sir T. W. H.
Southby, Commander Sir A. R. J.


Clarke, Colonel R. S. (E. Grinstead)
Jarvis, Sir J. J.
Spears, Brigadier-General E. L.


Clydesdale, Marquess of
Jones, L. (Swansea W.)
Spens, W. P.


Cobb, Captain E. C. (Preston)
Kerr, Colonel C. I. (Montrose)
Strauss, H. G. (Norwich)


Colman, N. C. D.
Kerr, Sir John Graham (Sco'sh Univs.)
Strickland, Captain W. F.


Colville, Rt. Hon. John
Limb, Sir J. Q.
Stuart, Rt. Hon. J. (Moray and Nairn)


Cook, Sir T. R. A. M. (Norfolk, N.)
Leeeh, Sir J. W.
Sutcliffe, H.


Cooke, J, D. (Hammersmith, S.)
Llewellin, Colonel J. J.
Thomson, Sir J. D. W.


Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Lloyd, Q. W.
Thorneyeroft, G. E. P.


Craven-Elliss, W.
Locker-Lampion, Comdr. O. S.
Thornton-Kemsley, C. N.


Culverwell, C. T.
Loftus. P. C.
Titchfield, Marquess of


Davies, C. (Montgomery)
MeCorquodale, M. S.
Tufnell, Lieut.-Commander R. L.


Dorman-Smith, Col. Rt. Hon. Sir R. H.
MeEwen, Capt. J. H. F.
Ward, Lieut.-Col. Sir A. L. (Hull)


Drawe, C.
MoKie, J. H.
Ward, Irene M. B. (Wallsend)


Dugdale, Captain T. L.
Magnay, T.
Waterhouse, Captain C


Duggan, H. J.
Margasson, Capt. Rt. Hen. H. D. R.
Watt, Lt.-Col. G. S. Harvie


Duncan, J. A. L.
Markham, S. F.
Whiteley, Major J. P. (Buckingham)


Eastwood, J. F.
Maxwell, Hon. S. A.
Wickham, Lt.-Col. E. T. R.


Eekersley, P. T.
Mills, Major J. D. (New Forest)
Williams, Sir H. G. (Croydon, S.)


Edmondson, Major Sir J.
Morris-Jonas, Sir Henry
Wllloughby de Eresby, Lord


Elliot, Rt. Hon. W. E.
Muirhead, Lt.-Col. A. J.
Womersley, Sir W. J.


Ellis, Sir G.
Nail, Sir J.
Wood, Hon. C. I. C.


Erskine-Hill, A. G.
O'Connor, Sir Teranes J.
Wragg, H.


Fildes, Sir H.
Palmar, G. E. H.
Wright, Wing-Commander J. A. C.


Findlay, Sir E.
Perkins, W. R. D.



Fleming, E. L.
Piskthorn, K. W. M.
TELLERS FOR THE AYES.—


Fremantle, Sir F. E.
Radford, E. A.
Mr. Munro and Mr. Furness.




NOES.


Adamson Jennie L. (Dartford)
Burke, W. A.
Davies, S. O. (Marthyr)


Alexander, Rt. Hon. A. V. (H'lsbr.)
Collindridge, F.
Dobble, W.


Ammon, C. G.
Cove, W. G.
Dunn, E. (Rother Valley)


Barr, J.
Cripps, Hon. Sir Stafford
Ede, J. C.


Burn, Rt. Hon. W. W.
Daggar, G.
Edwards, Sir C. (Bedwellty)


Bevan, A.
Dalton, H.
Edwards, N. (Caerphilly)


Buchanan, G.
Davidson, J. J. (Maryhill)
Fletcher, Lt.-Comdr. R. T. H.




Frankel, D.
Macdonald, G. (Ince)
Saxton. T.M.


Gallagher, W.
McEntes, V. La T.
Silkin, L.


Garro Jones, G. M.
Mainwaring W.H
Silverman, S. S.


Gibson, R. (Greanock)
Marshall, F.
Smith Ben (Rotherhithe)


Greenwood, Rt. Hon. A.
Mathers, G.
Smith, E. (Stoke)


Gnentell, D. R.
Maxton, J.
Sorensen, R W


Guest, Dr. L. H. (Islington, N.)
Massel, F.
Stephan, C.


Hall, G. H. (Aberdare)
Milner, Major J.
Stewart, W. J. (H'ght'n-is-Sp'ng)


Hall, J. H. (Whitechapol)
Morrison, Rt. Hon. H. (Haekney, S.)
Taylor, R. J. (Morpath)


Hayday, A.
Noel-Baker, P. J.
Tinker, J. J.


Hills. A. (Pontefract)
Parker, J.
Watkine, F. C.


Isaacs, G. A.
Pethick-Lawrence, Rt. Hon. F. W.
Watsan, W. McL.


Jagger, J.
Poote, C. C.
Westwood, J.


Jenkina, A. (Pontypool)
Price, M. P.
Wilkinson, Ellen


Jones, Sir H. Haydn (Marloneth)
Pritt, D. N.
William., E. J. (Ogmore)


Kennedy, Rt. Hon. T.
Ridley, G.
Wilmot, John


Kirby, B. V.
Ritson, J.
Woods, C. S. (Finsbury)


Lawson, J. J.
Robinson, W. A. (St. Helens)
Young, Sir R. (Newton)


Leach, W.
Rothschild, J. A. de



Logan, D. G.
Seely, Sir H. M.
TELLERS FOR THE NOES.—




Mr. Adamson and Mr. Anderson.


Question put, and agreed to.

Subsequent Lords Amendment in page 33, line 36, agreed to.

Lords Amendment: In page 34, line 24, at the end, insert:
and where a part of a building or block of buildings is occupied under a lease of which the unexpired term is less than six months, that person shall be deemed for the purpose of this section to be the occupier of that part who would be the occupier there of if every such lease thereof had been surrendered.
(11) The provisions of the last preceding Section shall apply in relation to the owner of a building or block of buildings who is providing an air-raid shelter of a permanent character under a scheme under this Section, as it applies in relation to the owner of any such premises as are mentioned in Sub-section (1) of that Section.

1.16 a.m.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
The first part of this Amendment deals with a matter to which I have already referred, when I explained that because of the introduction of the second reference to these words appearing earlier in the Clause they must be re-inserted at a later point.

Question put, and agreed to. —[Special Entry.]

Lords Amendment: In page 34, line 24, at the end, insert:

NEW CLAUSE A. —(Special provisions as to land used in common by tenants of certain buildings.)

"A.—(1) If, in the case of any building or block of buildings to which this section applies there is adjacent thereto any land used in common by the occupiers of the building or block, a request in writing signed by more than one-half in number of the occupiers of the separate parts of the building or block that the local authority should utilise

that land for the construction or erection of an air-raid shelter shall confer upon the local authority the like rights as respects entry upon the land and the execution of works thereon as they would possess if the request had been and continued to be concurred in by all persons in any way interested in the land.

(2) In this Section the expression 'building or block of buildings to which this Section applies' means a building or block of buildings which is situated in an area specified in an order made by the Minister under Part III of this Act, is wholly or mainly used for residential purposes and is let out in separate parts:

Provided that

(a)so much of any building or block of buildings as consists of, or is comprised in,any factory premises or commercial building shall be disregarded;
(b)the said expression does not include any building or block of buildings the owner of which may be required to provide air-raid shelter in accordance with a scheme prepared under the last preceding Section."

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Clause is concerned with what is, in the main, a matter of machinery. There are cases where people of the class who are entitled to free shelter live in blocks of flats or tenements where there is attached to the block of flats or tenements a piece of land which is used in common by the occupiers of the block. That piece of land may in certain cases be the only suitable piece of land on which a shelter constructed from materials provided free by the Government can be installed. As matters stand, unless all the occupiers consent the land cannot be used for that purpose. The sole object of the Clause is to provide that where the majority of the occupiers desire the land to be so used it may be used even if a minority do not agree.

1.18.a.m

Mr. Ede: This Clause, I understand, has been introduced mainly to meet the point, mentioned by my hon. Friend the Member for Jarrow (Miss Wilkinson) in Committee and on the Report stage of the Bill. It does not appear to me to carry out all the points which we on this side of the House think should be met. As I read the Clause, unless all the tenants and occupiers are entitled to the common use of the land, it does not become applicable. That is the first point. Another point which the hon. Member for Jarrow wanted to be included was the case where the land has been so cut up into small pieces and let out, not to all the tenants in common but to each separate tenant individually, either in such shapes or sizes that it is not possible to put an appropriate kind of shelter on it. That, again, is not dealt with in this Clause. It would appear that it might have been perfectly possible in drafting the Clause to have taken into account a far wider range of cases than those actually dealt with by the Clause. As far as it goes, it is undoubtedly an improvement, but it does not go very far. I cannot help wishing that the right hon. Gentleman had consulted my hon. and learned Friend the Member for East Bristol (Sir S. Cripps), because it appears to be only in consultation with him that we can get anything approaching satisfaction. It seems that my hon. and learned Friend can explain the idea much better than the Government can do. I hope that the Government will watch the working of this Clause and at the earliest possible moment carry out an expansion to it to cover the points which have been raised.

1.20 a.m.

Mr. Gallacher: I would like to draw attention to another point that leaves a serious loop-hole. There is not only the question of the land that may be divided into sections and each owned by a particular tenant of a particular block of flats but there are some cases where a piece of land adjacent to the house may be owned by the tenants in the bottom part of the flat. It may be considered to be theirs and actually under their control. I would also like to know what is the position if you have a situation in which there are 10 tenants of a flat and five are for a shelter and five against? The Clause lays it down that a request is to

be in writing signed by more than half. You could quite easily have a situation where you have evens so far as the demand is concerned. I am of opinion that if you have even one tenant who considers it necessary to have a shelter, there should be power to ensure that a shelter is there. You could quite easily have a situation where there are 11 tenants, and five are for and six against. They will get no shelter. I suggest that this Clause should be recast so as to make it easier in those cases to get shelters provided, to do away with the necessity for a majority of the tenants to make a request, and to provide that consideration shall be given to a request for a shelter where it comes either from a minority of a particular character or else from any tenant.

Subsequent Lords Amendments to page 53, line 24, agreed to.

CLAUSE 55—(Evacuation of civil population.)

Lords Amendment: In page 54, line 12, leave out "penalties" and insert:
fines, not in any case exceeding fifty pounds.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment gives effect to a promise made in the Committee stage that provision would be included in the Bill on the subject of penalties to be imposed under regulations dealing with evacuation.

1.26 a.m.

Mr. H. Morrison: I beg to move, as an Amendment to the Lords Amendment, at the end, to add:
or imprisonment not exceeding three months.
This is a case where the Minister is allowed under the Bill to make regulations for penalties in respect of offences with regard to the reception of evacuated persons. It is provided that if the owner or the occupier who has to receive persons from an evacuated area breaks his undertaking to the local authority, or fails to comply with requirements of the Minister, under this Amendment he can be fined, but not, in any case, exceeding £50. A very wealthy person owning a very large


house might be perfectly prepared to be fined £50, and in that case it would not be an effective penalty. We, therefore, propose that the Minister shall have power to include in his regulations "or imprisonment not exceeding three months," and that would give the court power to impose such a penalty. It does not follow that the court would impose it, but it is necessary that this provision should be in, in order that the court, in cases where the owner of premises could easily afford to pay the £50 fine, may have penalties which are strong enough to deter him from breaches of the law. I do suggest that this is a reasonable thing. It is permissive in the case of the Minister to make the regulation, and it is permissive in the case of the court.

Sir J. Anderson: On behalf of the Government, I accept the Amendment.

Amendment to Lords Amendment agreed to.

Subsequent Lords Amendments to page 58, line 11, agreed to.

Lords Amendment: In page 59, line 6, at the end, insert:

NEW CLAUSE B. —(Power of Minister to make bye-laws with respect to land used for experiments with explosives.)

"The Minister shall—

(a)as respects any land held on behalf of the Crown and appropriated for the use of the Minister for the purpose of carrying out experiments with explosives; or
(b)as respects any other land which the Minister has the right to use for the said purpose,

have the same power of making bye-laws as is conferred on a Secretary of State as respects land appropriated for a military purpose or, as the case may be, as respects land which he has the right to use for such a purpose, and the provisions of the Military Lands Act, 1892, and the Military Lands Act, 1900, relating to bye-laws shall with the necessary modifications apply accordingly."

1.28 a.m.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."

This is a new Clause which, I think, carries its own justification. We have found in practice that it is not at all convenient having to wait until land

available at Shoeburyness for the purpose of experiments with high explosives can be placed at our disposal for experiments we wish to carry out. We are in treaty to secure a suitable area of land on which we can carry out our own experiments and in the expectation that we shall succeed in obtaining that land we are seeking by this Clause by-law making powers similar in every respect to those possessed already by the military authorities.

Subsequent Lords Amendments to page 59, line 22, agreed to.

CLAUSE 60. —(Power of local authorities to appropriate lands and buildings for purposes of their Civil Defence functions.)

Lords Amendment: In page 59, line 37, after "cease" insert:
and any such directions may require the lands or buildings to be restored, to such extent as may be specified, to their former condition.

Mr. Speaker: I have to inform the House that this and the next Amendment raise questions of Privilege.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
Under the Clause as it left this House the Minister had power to require the use of premises under the control of the local authority for Civil Defence purposes to be discontinued. The effect of the Amendment is to add to the powers of the Minister and to enable him to give directions requiring the land or buildings in question to be restored to such an extent as may be specified in the directions, or to their former condition, on ceasing to be used for Civil Defence purposes. The Amendment seems to be a reasonable one, and I think we should agree with it.

Lords Amendment: In page 59, line 40, insert:
(4) In this Section the expression 'use, in relation to lands owned by or leased to a local authority, includes the erection of buildings and other structures thereon, the making or excavations therein, and the alteration and maintenance of any such buildings, structures or excavations, and, in relation to buildings owned by or leased to an authority, includes the alteration and maintenance of those buildings.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
The purpose of this Clause is to clarify the position as to the power of local authorities—which is purely permissive—to erect buildings on lands under their control, to maintain them, or to make alterations in existing buildings. In substance the Amendment defines the expression "use."

1.31 a.m.

Mr. Ede: I want to ask the right hon. Gentleman why this Amendment is confined to the lands owned or leased by local authorities, because the Clause was made in the Committee stage to include any public utility undertakers also. I suppose it will be argued by the courts that inasmuch as in the earlier part of the Clause it says "local authorities or public utility undertakers" and as here it is strictly confined to local authorities this particular Sub-section will not apply to lands used by public utility undertakers. I do not know whether it was an oversight or whether it has been done by design, but it does seem highly desirable that, if possible, all classes of premises should be borne in mind. I am sorry I noticed it only as the right hon. Gentleman was speaking, but clearly it is an oversight on somebody's part that it does not include public utility undertakers as well as local authorities.

1.32 a.m.

Sir S. Cripps: Perhaps I may explain this to my hon. Friend. I think that the position as regards local authorities and public utility undertakers having power to use lands are probably slightly different. Whereas there might have been a doubt as to local authorities which have statutory powers to use land by way of making excavations or otherwise, there would not be any doubt as to public utility undertakers who have these powers already under the words "using their own land." They are using their own land and can use it under the existing powers.

Sir J. Anderson: I am much obliged to the hon. and learned Member.

Subsequent Lords Amendment, in page 61, line 18, agreed to.

Lords Amendment: In page 61, line 19, at the end, insert:

NEW CLAUSE C. —(Extension of borrowing powers of trustees, etc.)

"(1) The provision of air-raid shelter shall be deemed to be an improvement authorised by the Settled Land Act, 1925, and mentioned in Part II of the Third Schedule to that Act.

(2)Any liquidator, trustee in bankruptcy, receiver, committee or other person acting in a fiduciary capacity who is, as such, the occupier of any factory premises, the owner of any mine or the owner of any commercial building or of any building or block of buildings to which Section thirty of this Act applies shall, for the purpose of providing air-raid shelter or complying with any obligation imposed on him by or under any of the provisions of this Act, have power (in addition to any other powers enabling him in that behalf) —

(a) to utilise any moneys in his hands in his capacity as liquidator, trustee, receiver committee or otherwise as aforesaid;
(b) to raise money by the sale or mortgage of any property vested in him or under his control in that capacity,

and any money reasonably expended by him for the said purpose shall be treated as part of his expenses incurred in that capacity and shall be allowed in account accordingly.

(3)Where the owner of any commercial building or any such building or block of buildings as aforesaid is a mortgagee, he shall be entitled to add to his security any money reasonably expended by him for the purpose of providing air-raid shelter in connection with the building or block or of complying with any obligation imposed on him by or under this Act as owner of the building or block."

1.34 a.m.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This matter is, of course, of a somewhat technical nature. The House will not expect from me more than a very general explanation. The object of this Amendment is to eliminate doubt as to the powers of trustees of land, or other persons having fiduciary powers of management of land, in regard to the provision of ar-raid shelters. The first Subsection deals with the ordinary case of trustees under settlements, and I am advised that the effect is twofold: In the first place, by the inclusion of the provision of air-raid shelter among improvements authorised by the Settled Land Act, 1925, the trustees are authorised to apply capital moneys arising out of the settlement and also to borrow money for the purpose of providing shelter on the security of the settled land.


In the second place, the reference to Part 2 of the Third Schedule to the Settled Land Act has, I am advised, this effect, that the trustees of settlements will be enabled, and the court will be in the position, to require in proper cases that the cost of the provision of air-raid shelter shall be recouped by instalments out of income.
The second Sub-section confers corresponding powers of applying money or of raising money by mortgage on certain persons whose position is to some extent analogous to that of the trustees who are dealt with in Sub-section (1)—such persons, for example, as liquidators, trustees in bankruptcy, or receivers. It is clearly desirable that these persons should be endowed with the like powers, and it is not clear, I am advised, that that would be so under the law as it stands unless express provision were made in this Sub-section.
Sub-section (3) deals with an entirely different point. This Section makes it clear that a mortgagee, treated as the owner of a commercial building or block of flats, may add to his security an amount reasonably spent by him for his obligations under the Act.

1.38 a.m.

Mr. Gallacher: I want to ask one question. Will the right hon. Gentleman explain the words:
The provision of air-raid shelter shall be deemed to be an improvement authorised by the Settled Land Act 1925.
Will he explain the words "deemed to be an improvement," in relation to improvements in a landlord's property for which the tenants have to pay?

The Attorney-General (Sir Donald Somervell): My right hon. Friend has explained that the effect is to enable trustees who may otherwise have no powers to raise money, either by way of a charge on property or from capital, to do so, and this is effected by the words:
The provision of air-raid shelter shall be deemed to be an improvement.
It is so deemed for the purpose of this Sub-section, and that is the inference to be drawn from it.

Mr. Gallacher: May I ask the Attorney-General whether, if a landlord wanted to raise a mortgage on his property, this

could be deemed to be an improvement on which he could increase the character of his mortgage, although it is an improvement for which the tenants have had to pay? Is not that the case?

The Attorney-General: I have done my best to explain why these words are put in. I cannot go on making speeches if the hon. Gentleman did not follow my explanation.

Mr. McKie: Does the hon. Member for West Fife (Mr. Gallacher) think the landlord is the only person who is presumed to have an obligation?

Subsequent Lords Amendments to page 62, line 8, agreed to.

Lords Amendment: In page 62, line 8, at the end, insert:

NEW CLAUSE E. —(Provision of air-raid shelter not to increase valuation for rating.)

"Section one of the Rating and Valuation (Air-Raid Works) Act, 1938 (which provides for the relief of air-raid protection works from rates) shall, in relation to a. hereditament forming part of a building, have effect as if any structural alterations or improvements made in the building or on land appurtenant to the building for the purpose of providing air-raid shelter were structural alterations or improvements to the hereditament, and in ascertaining the value for rating purposes of a hereditament under the principal Act (as defined in the said Section one) no regard shall be had to any increase in the rent thereof (whether made by virtue of this Act or not) which is attributable to the provision of air-raid shelter for persons living or working in the hereditament."

1.42 a.m.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Clause is inserted for the purpose of removing doubts. It was at first thought that the provisions of the Rating and Valuation (Air-Raid Works) Act, 1938, did beyond question ensure that works of the kind now in question would not be taken into account for the purpose of valuation for rating, but attention has been called to at least one case in which, as I am advised, it might conceivably be held that that Act had failed of its purpose, The Amendment is designed to put the matter beyond doubt. The case in question which it is thought might not


be covered by the existing Act is a case where various floors of a building are each treated as separate hereditaments for rating purposes and separately valued. In that case it is suggested that Section of the Act might be held not to apply when there were no structural alterations or improvements to the hereditaments within the meaning of Section 1 (1). The matter is highly technical.

Question put, and agreed to. —[Special Entry.]

CLAUSE 69. —(Determination of claims to compensation and increases of rent.)

Lords Amendment: In page 65, line 24, after "Part III," insert "or Part IV."

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."

This is a drafting Amendment.

1.44 a.m.

Sir S. Cripps: Does the Lord Privy Seal tell the House that this is really drafting? Would he explain to the House what is the effect of the addition of those words and what extra matters will now be covered by the inclusion of the words "or Part IV"?

CLAUSE 76. —(Exemption of certain works from building by-laws, etc.)

Lords Amendment: In page 69, line 36, at the end, insert:
(3) For the purposes of any enactment regulating the erection of new buildings or the extension of buildings by reference to the position of other buildings, no account shall be taken of any building, erection or excavation exempted by or under this Section from the operation of that enactment.

1.45 a.m.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Clause meets the point raised at an earlier stage by the right hon. Gentleman the Member for South Hackney (Mr. H. Morrison). Its purpose is to ensure, in the case of buildings or structures which under this Bill would be exempted from the necessity of complying with the provisions relating to building lines, that exemption shall not have the effect of automatically entitling other people to construct other types of build-

ings extending beyond the building line previously recognised.

CLAUSE 81 (Exercise of powers of Board of Trade.)

Lords Amendment: In page 71, line 17, at the end, insert:

NEW CLAUSE F—(Saving for telegraphic lines.)

"Section six of the Telegraph Act, 1878 (which empowers the Postmaster-General to establish telegraphic lines on certain undertakings) shall apply to underground air-raid shelters, premises and parking places, and works connected therewith, constructed by a local authority under Part II of this Act, as it applies to the undertakings mentioned in the said Section six, and Section seven of the said Act (which makes provision as to work done in the execution of certain undertakings which involves alteration in telegraphic lines) shall apply to any work authorised or required to be done under this Act as it applies to work done in the execution of such an undertaking as is mentioned in the said Section seven."

Mr. Speaker: I have to acquaint the House that this Amendment raises a question of Privilege.

Mr. Wedgwood Benn: On that point, is it not customary when privilege Amendments come from another place to italicise the words or underline them?

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."

This is a provision inserted for the purpose of safeguarding the position of the Postmaster-General in respect of certain works controlled by him. Section 6 of the Telegraph Act, 1878, authorises the Postmaster-General to place and maintain telegraphic lines in certain positions. Part 2 of the present Bill authorises the construction of underground shelters, parking places, and other structures, and one of the objects of this new Clause is to authorise the laying of telegraph lines over or across such underground construction. Further, under Section 7 of the same Telegraph Act, provision is made for work which involves alterations in telegraph lines. The position there is that notice has to be given to the Postmaster-General of any works in pursuance of Act of Parliament involving alteration, and if the Postmaster-General replies that he will do the alterations to the cables, his charges have to be met.


Works required under this Bill will not require confirmation, but the object of the new Clause is to make it clear that the Telegraph Act will apply to underground shelters. I am given to understand that it is usual to include a provision of this kind.

CLAUSE 83. —(Definitions of "factory," "factory premises," "mine" and "commercial building" and, interpretation of references to persons working and persons employed.)

Lords Amendment: In page 72, line 33, after "restaurant," insert:
other than a restaurant carried on for the use of persons working in the factory.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
I think the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps) recognises this Amendment. It is inserted to meet a point to which he called attention at an earlier stage. Doubt was then raised whether the Bill as it stood might not have the effect of excluding a restaurant provided on factory premises for the benefit of people employed on such premises. The Amendment makes it clear that such a restaurant is not excluded.

Subsequent Lords Amendments to page 74, line 33, agreed to.

Lords Amendment: In page 74, line 35, at the end, insert:
(8) For the purposes of this Act the number of persons who work in or about a mine shall be deemed to be a number ascertained as follows, that is to say—

(a) by having regard to all the people employed in or about the mine and ascertaining how many of them are from time to time simultaneously present in or about the mine otherwise than below the surface, and
(b)if the numbers so ascertained fluctuate, by ascertaining the highest number which, throughout any consecutive period of fifteen minutes, is equalled or exceeded."

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is the substantial Amendment to which the drafting Amendments have been leading up. Hon. Members may remember that when this Clause was under

discussion at an earlier stage some question was raised as to its applicability to the rather special case of a mine. The Clause is concerned with the provision of shelter for the persons employed in or in connection with a mine, and the particular point which the Amendment is directed to is the estimation of the numbers of people for whom shelter has to be provided by the mine owner. The case of a mine presents certain rather special features in this respect. There is normally a pool of workers at the mine-head and that pool is added to and reduced in two ways. It is added to by men coming to the surface from work underground and by men coming to the mine-head to go down in the next shift. It is reduced by people leaving the mine-head on the termination of their shift and by people leaving the mine-head to go down in the cages returning to the bottom of the mine. There is a continual fluctuation in the number of people at the mine-head, and the problem Is to determine with precision and fairness what is the number of people which should be taken as a standard for the purpose of the provision of shelter.
This Clause is, I frankly admit, somewhat difficult to understand as a mere matter of words. I have been at some pains to try and understand it, and I think I have succeeded. I believe the effect of it is this, that the mine owner has to ascertain the greatest number of people likely to be found at the mine-head throughout a continuous period of 15 minutes. Any number in excess of that figure that may be at the mine-head for less than 15 minutes would be disregarded for the purpose of providing shelter, because it is assumed, and reasonably assumed, that they would have got away either on their return home or by going down the mine, so that they would not require shelter to be provided for them. This Amendment has been discussed with the mine owners and with representatives of the workers, and I think it is generally accepted that it represents a reasonable settlement of a rather troublesome problem.

1.54 a.m.

Mr. Gordon Macdonald: I want to make quite clear what is involved in this Amendment. We have mines with 250 men working over ground and 2,000 men working underground, and there are times when at least 500 or 600 of these


men are on the surface in addition to those working on the surface. At certain times in some pits we have at least 600 or 700 men on the surface, and do I understand that shelter shall be provided for those 600 or 700 men? If it is, who has to decide the number of people? I can understand that the divisional inspector of mines would be the first person to decide and, if that is so, is that to be done in consultation with both sides? I want to be clear on this point.

1.55 a.m.

Sir J. Anderson: The purpose of the Amendment is to meet the very case which has been mentioned by the hon. Member. If it should be shown that such a number will be found at any time of the day at the mine-head for a period of, or exceeding, 15 minutes, then that number must be provided with shelter, and shelter has to be provided for the highest number so found. As regards the method by which the actual number is to be ascertained, what we hope is that the mine owner, in consultation with the representatives of the workers, will normally be able to agree, and there are records which I understand are normally maintained. If they should fail to agree, the authority who would put the final requirement in the notice to the mine owner as to the number of people for whom shelter is to be provided would be the divisional mines inspector.

1.56 a.m.

Mr. H. Morrison: I beg to move, as an Amendment to the Lords Amendment, in line 2, to leave out from the second, "be" to the end, and to add instead thereof:
the highest number which throughout any consecutive period of fifteen minutes is present on the surface of the mine.
Perhaps it would be convenient to the House if I were to read out the new Sub-section. It is:
For the purposes of this Act the number of persons who work in or about a mine shall be deemed to be the highest number which throughout any consecutive period of fifteen minutes is present on the surface of the mine.
The Lord Privy Seal said that this Amendment was put down after consultation with the mine owners and the Miners Federation. I should like him to tell us whether the Miners Federation actually accepted this Amendment. I want to call the attention of the House to

the actual wording of it. May I call the attention of the House to paragraph (a), which sets out the basis on which the number of persons in or about a mine is to be calculated? It provides that regard must be had to all the people employed in or about a mine to ascertain how many of them are "from time to time" simultaneously present in or about the mine otherwise than below the surface. "From time to time" is not a defined legal phrase. Time to time can presumably be determined by the owners of the mine. Suppose the owner of the mine took out the lowest period of the assembly of persons working on one day and compared it with the lowest point of the next day or at any rate picked out his time when relatively few persons were about because he could determine from time to time.

Sir J. Anderson: The right hon. Gentleman suggests that it would be open to a mine owner to select the times at which he takes notice of the number of people, but has he given due weight to the words in the first line of paragraph (a):
by having regard to all the people employed in or about the mine "?
The view of the Government is that those words secure that a complete record should be available and should be looked at.

Mr. Morrison: In any case this term "having regard to" is not mandatory. It really is not satisfactory from a legal point of view. It does not determine the issues. I do not like this "time to time" and I do not like the "having regard to" because I think they are going to involve difficulties of legal interpretation later on. You may have a mine-owner who is technically complying with the terms of this Sub-section but who is in fact evading its purpose. Paragraph (b) goes on to say that of the recorded figures and returns he picks out the highest number, during a period of fifteen minutes, present on the surface of the mine. Paragraph (b) does not operate at all unless it be the case that the numbers do in fact fluctuate. If the purpose of the Sub-section is to find the highest number of persons who are employed in or about the mine otherwise than below the surface during a consecutive period of fifteen minutes why not say so? Why


go bothering about this paragraph (a) at all. It seems to us that you do not need that paragraph at all. We should merely provide, as my Amendment does, that for the purpose of this Act the number of persons who were in or about the mine should be deemed to be the highest number which, throughout any consecutive period of fifteen minutes, is present on the surface of the mine. That seems to me to say what the Lord Privy Seal's speech said. Is it not better to have this than a roundabout way of getting to this result?

2.3 a.m.

Mr. Mainwaring: If the Lord Privy Seal were accustomed to mining practice he would know that all the men at the pit-head meeting would be a fine example of what you can see at any given time. There is a point with regard to the definition of what is a mine. I have in mind now two sets of shafts belonging to the same colliery but which are one and a quarter miles apart. Would the whole of that belong to the same mine? I do not know whether this pit has been considered. Would they be one mine or would two separate shelters be provided in that case? You can find numerous cases of a difficulty of that kind.

2.4 a.m.

Sir S. Cripps: Can the right hon. Gentleman explain what this means, because I cannot for the life of me understand the words which are in their Lordships' Amendment. If one reads it simply taking the case of fluctuations in the ascertainments it reads like this:
For the purpose of this Act the number of persons working, that is to say by ascertaining the highest number throughout any consecutive period of fifteen minutes which is equalled or exceeded.
Is a highest number equal to? You are ascertaining the highest number. How do you ascertain the highest number which is exceeded, because that which exceeds it must be higher still. You are ascertaining the highest number and that means that you have to get to the peak at any time which you count. How can you have a number which exceeds that, because you have got as high as you can go. I think it is absolute nonsense. Surely for that reason alone it would be worth correcting their Lordships' English.

2.7 a.m.

Sir J. Anderson: I do not think it is merely a question of correcting the English. It is a question of getting the true conception. The right hon. Gentleman the Member for South Hackney (Mr. H. Morrison) suggested a form of words which, I think, would not do because his form of words would require that you should find the highest number of people present as a collection of individuals throughout a period of 15 minutes. That would ignore the fact that the composition of this body of people for whom we have to make provision may be constantly changing. Nevertheless you have to provide shelter for the full number if you find that that number, whatever it may be, is likely to be at the mine-head for a continuous period of 15 minutes. I think it is an attempt to express in words a process which becomes perfectly simple if it is set out on paper in the form of a graph. I think it works quite well in a practical way from that point of view.

2.8 a.m.

Mr. E. J. Williams: It is very difficult for the Lord Privy Seal to appreciate what miners thoroughly realise. It should be possible to insert the words "maximum number at any fifteen minutes." I agree that the number is fluctuating and that there are different kinds of mines where you have very large numbers of people, most of them coming to wait for the cages, in addition to the normal number of persons engaged on the surface. The maximum number for any 15 minutes on the surface ready to join a shift or a slant should be the number for whom shelter should be provided. I am not quite satisfied with the reply given to my hon. Friend the Member for Ince (Mr. G. Macdonald). I want to know how this work is to be carried out. Who is to do the work? Is the Inspector of Mines to ascertain the number or is it the workmen's representative in conjunction with the management of the mine? Are they jointly to see that shelter provision is made for them? I would like to know what is to be done to provide shelter for important key-men on the surface, such as men in the fan-house, men who are in charge of the ventilating plant. It must be appreciated that if the fan house is damaged all the men underground are imprisoned. It has the effect of a bomb striking the


very shaft itself. I want to know whether these key-men on the fan-house or on the winding gear are to have special provision. Is there to be provision for the winding-engine similar to that which is being provided for the blast furnaces in this country? Upon these things the lives of 1,000 or 2,000 men in the pit may depend. I have seen the booklet which has been issued, and frankly it does not meet the questions addressed to the Minister. Is this to be jointly done by the men and the management, or by whom? The maximum number who have to descend periodically ought to be provided for without any quibbling about numbers.

2.11 a.m.

Mr. Gallacher: There is a point I would like the Minister to deal with. It is in connection with the situation which would arise at the pit-head when a train comes in with 1000 men and those men begin to make their way down below, and within 15 minutes 400 get below. The aeroplanes might not be sufficienty considerate to wait until the train comes in, and the whole 1,000 men may land on the surface of the pit with only a minute or so to get into air-raid shelters. Because of this 15 minute interval there is only shelter provided for 800 men and there are, perhaps, 1,200 men rushing for shelter. I suggest that the maximum number of men at the pit-head at any regular moment should be the number for whom shelter is to be provided. There are many cases where 1,000 men will come off a train and it may be that the moment they come off the train is just the moment for getting into the shelter. You can have a very serious situation if you do not have the necesssary shelter.

Mr. Benn: May I ask the Lord Privy Seal for an explanation, because the last words of paragraph (3) are extremely obscure? Suppose you take a period of 15 minutes, and there are 200 men present at the beginning of the period and 205 men present at the end. What provision of air-raid shelter do you make?

2.13 a.m.

Sir J. Anderson: I know how this thing is intended to work, and I suggest that if we may look at it first apart from the actual words perhaps we, shall be in a

better position to see how far the words serve to give effect to what is intended. You have a fluctuating number of people present at the mine-head. Suppose that that fluctuating number is represented by a curve. It may be a curve that is flat, or one that has several peaks. It is possible, without the slightest difficulty in practice, if you have such a curve available to you on a piece of paper, to set off on that curve a period representing 15 minutes. You may find that you can set off several periods of 15 minutes, each period beginning and ending with the same number of people and, between the limits of the 15 minute period, a higher number of people. If the curve has only one peak there will obviously be only one position which satisfies the requirements of this Clause, and then, no doubt, the wording which has been criticised, "equalled or exceeded," has no application. If the curve has two peaks, you will get two positions in which you can set off against the curve a period of 15 minutes, but one of them may have a higher ordinate—to use a technical term—than another. The Clause requires you to take the higher peak of the two. If the numbers fluctuate, that is if you have a curve and not a straight line, you ascertain the highest number which, throughout a period of 15 minutes, is equalled or exceeded. If the curve were flat at the top it would only be equalled; but if it is not flat at the top that number may be exceeded, and because the curve may have more than one peak then you may have more than one number to which these words have application— "equalled or exceeded." Throughout the period of 15 minutes you take the highest number which is equalled or exceeded.

Mr. Benn: Will the Lord Privy Seal answer the question I put to him? If in fact over this selected period of 15 minutes you start with 200 men and at the end have, say, 220, what provision do you make?

Sir J. Anderson: I suggest that that will not happen because in the process of getting to the highest number you have got so to arrange your drawing that at the beginning and end of the period of 15 minutes you have equality. You cut off the top of the curve.

Mr. Mainwaring: In estimating this number, would they take into considera-


tion what happens on pay-day? That would probably give you the maximum number that you would get in an ordinary colliery, when the night-shifts as well as the day-shifts might be together around the colliery offices.

2.18 a.m.

Mr. Grenfell: If I understand this Amendment rightly it does make provision, not only for men who are on the surface but men who will be present on the surface at any given time. It refers to men working in or about mines in making the ascertainment of persons for whom the provision has to be made on the surface by computing the number of people working in and about the mine who may be on the surface at the time. Let me assume that the number of men employed in the mine is 500, and that in the ordinary working of the mine 400 men are required below ground and 100 men on the surface. You then have to make provision for the 100 who work on the surface, because you make no provision for the men who work below. That is the first paragraph (a) in this Amendment. The men come up at the end of the shift, or go down, in large numbers. They cannot be cleared off the surface immediately, and they take some time in going underground when they have to be taken into the ascertainment. That may give at the time 20 or 30 additional men working in and about the mine, who are not regularly to be found on the surface, for 15 or 30 minutes. They go down 20 or 30 at a time. It may be at the end of a shift when men are working below ground and on the surface, the number of men who are computed by this method may increase at the end of the shift or at the beginning.
If I understand it aright, the idea is to find out the total number of men working on the surface and the largest additional number of men there may be in any 15 minutes on the surface, even though not regularly employed there. I do not understand the wording of this proposal or how the biggest figure can be excelled. The right hon. Gentleman has not explained that to us. I think the experts in another place will find it very difficult to show how, when they have taken the largest number, that number can be exceeded. If that point can be made clear I think I can see clearly what is conveyed

by this Amendment. I should like to know whether the right hon. Gentleman agrees with me that this computation is not confined to men who work on the surface but may include men who work underground or who in passage from the surface to underground may be near the mouth of the shaft and must be taken into computation.

2.21 a.m.

Mr. Ede: I am bound to say we cannot follow on this side—and I gather from the looks of some hon. Gentlemen behind the right hon. Gentleman that they cannot follow either—his explanation of this particular Amendment. I understood him to tell my right hon. Friend that the two ends of this 15 minutes must be level on the graph. Surely if one is taking a minute-to-minute record there should be no point in the 15 minutes or any previous point at which the number of men will be equal? If at 9.45 there are 150 men there, it does not follow that at 10 o'clock there will be 150. At no period in the 15 minutes measured like that will you get the graph level.

Sir J. Anderson: I do not want to interrupt the hon. Gentleman unnecessarily, but if the curve comes to a peak you must be able to cut off a part at the top by a horizontal line, representing 15 minutes. If you do that, will you not have a beginning and an end of the 15-minute line at the same number of men, and so have a figure?

Mr. Ede: I have spent a good deal of my life constructing graphs similar to this, and I should very much like in actual practice to come across the kind of graph the right hon. Gentleman has been explaining. It is the sort of thing one finds in text-books but which one never comes across when trying to apply it in actual life. I could imagine taking a purely theoretical curve—one that started at the bottom in the morning and went steadily upwards all day and never had a descending line in it all day. That is theoretically possible, but it is quite impossible to imagine that at any given 15 minutes you are going to get the same number at the beginning as you do at the end. It seems to me that the Amendment of my right hon. Friend has all the advantages of simplicity. I cannot imagine how anyone is going to work paragraph (a) when the words "from


time to time" mean nothing. It means that you select the times at which you will have your curve, and it would be quite easily possible for these times to be so selected as to enable no fluctuation to occur. If that happens, paragraph (a) does not come into operation at all. Unless there is a fluctuation in the method used by paragraph (a), paragraph (b) does not come into operation.
I suggest that this Clause does not carry out any of the things which the right hon. Gentleman opposite has been talking about. He has assured the House that there will be co-operation between the mine owners' and the mine workers' representatives in carrying out the Amendment. There is nothing in it to call for that. As I read the Amendment, a person in charge of a mine can choose his time "from time to time." It does not specify any number of times during the day. What he has explained to us in his graph has been a constant register of the persons who are at the surface at any given moment, but it does not say so in the Clause, and I can well understand why he asked us not to consider the words of the Clause but to consider the thesis he has worked out which is enshrined in some other Clause but certainly not in this one. I am not helped on this occasion by an explanation from the hon. and learned Member for East Bristol (Sir S. Cripps), nor has the right hon. Gentleman opposite managed to get any hon. Member on his own side to explain to us exactly what is the legal significance of this Clause. I do suggest that my right hon. Friend's wording is simple. It does mean that you will take the 15 minutes in which the greatest number of men are present on the surface of the mine and that is the number for which you will have to make provision. That is what I gather both sides of the House want to do and surely in a matter of this kind it is as well to put it in the simplest possible language.

2.27 a.m.

Dr. Guest: I appeal to the right hon. Gentleman to accept the wording of the Amendment which has been moved from this side of the House and not to be led astray by these mathematical terms, because this mathematical language into which he has strayed is not properly interpreted by the language in the words of the Clause. I venture to suggest that the words of the Clause as put down are

really complete nonsense and nothing else. The object of the Clause is obviously to provide protection for the largest number of men at the surface at any given time. That is the simple purpose of the Clause, and how that highest number can be exceeded nobody but abstract mathematicians could possibly understand. In common sense it cannot be exceeded and these words mean nothing. It is a great pity that we have not with us to-night the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden), because I notice from the Press that he has been lately turning very frequently for illustration of political things to "Alice in Wonderland." I really think "Alice in Wonderland" and "Alice Through the Looking Glass" are required to explain the nonsensical language used in this Clause. The hon. and learned Member for East Bristol (Sir S. Cripps) suggested that Einstein could not have bettered it, but Einstein would in these matters be logical. When you get a mathematician who is a man trained in the use of language he is able to translate his mathematical conception into plain English, and if you have a mathematical conception which you cannot translate into plain English, I must say your mathematics are wrong as well as your English. The essential thing is to get this into plain and comprehensible language because nobody in this House, studying the Clause as it is, would really be able to understand it or interpret it. I am quite certain that whoever did understand it in this House or pretended to understand it would certainly find that if this Clause came to be interpreted in any court of law it would not be understood but would be ridiculed. I want to see a straightforward alteration of the wording of this Clause. The words proposed by the right hon. Gentleman the Member for South Hackney (Mr. H. Morrison) are quite clear. They give the meaning which the House wishes to convey and I hope the Lord Privy Seal will accept them.

2.31 a.m.

Mr. Spenss: It is now 2.30. In 15 minutes it will be 2.45. There are approximately at this moment 80 Members in the Chamber. At 2.35 there may be 90. At 2.40 there may be 87 and at 2.45 there may be 80 Members in the Chamber. This paragraph (b) means the greatest number which, throughout the consec-


utive period of 15 minutes are in the Chamber, and throughout that period there are always 80 Members in the Chamber. The difference between my right hon. Friend's draft and the one suggested from the other side is that my right hon. Friend is trying to get the greatest number which is continuously throughout the 15 minutes in the Chamber, while the other side suggest the greatest number at any time in the 15 minutes. The paragraph is clear. It means the greatest common number during the 15 minutes.

2.33 a.m.

Sir H. Williams: I have listened with great care to my hon. and learned Friend's statement, which merely means the minimum number. That is not the intention of the right hon. Gentleman the Lord Privy Seal. The Amendment moved from the other side does not mean anything at all. Suppose you have three or four hundred men, are you going to count them every minute? You cannot do it. It is plain that both proposals are unworkable.

2.34 a.m.

Sir Joseph Nall: If the Lords Amendment were agreed to now, that would be the final form in the Act and it could not be altered. On the other hand, if an Amendment of any sort to the Lords Amendment were accepted with the understanding that the Lord Privy Seal should reconsider the wording, time would be gained to enable the proper words to be inserted. I suggest that the Amendment to the Amendment now before the House might be allowed to pass on the understanding that the Government will consider it in the next few hours and bring in a further Amendment at the resumed sitting this afternoon.

2.36 a.m.

The Attorney-General: If the Amendment to the Amendment were withdrawn or defeated, my right hon. Friend the Lord Privy Seal would be prepared to move the insertion of new words. This would give an opportunity, if necessary, for further consideration. The words which he would be prepared to move would be as follows: After the words "if the numbers so ascertained fluctuate, by ascertaining" to insert "the highest figure below which throughout any con-

secutive period of fifteen minutes the numbers do not fall." The question raised by the right hon. and learned Member for East Bristol (Sir S. Cripps) was one of ambiguity or illogicality in speaking of the highest number being exceeded, and I am suggesting that if the House would agree to insert those words that difficulty would be got over.

2.38 a.m.

Mr. H. Morrison: I can only speak by leave of the Leader of the House. To be frank, I do not think the Attorney-General's words materially improve the situation, because we are still on the point of paragraph (a) and certain other words which we think thoroughly objectionable, and the Attorney-General does not propose to alter them. But I understand the Attorney-General to suggest that we should get some words in, and that then there can be some form of consultation between Ministers and those on this side. If they will undertake, should agreement be reached, to put in some better words in another place, and if the Minister can undertake that my hon. Friend the Member for Ince (Mr. G. Macdonald) and perhaps two or three of his mining colleagues will discuss the matter with him to-day with a view to agreement being reached, I think I would be disposed to accept the Amendment. I do not want the Attorney-General to think that I regard the Amendment he proposes as in any way meeting the points of substance raised, but, if discussions can proceed to-day with a view to agreement being reached, I would be disposed to withdraw my Amendment. That is a practical course to pursue.

Sir Geoffrey Ellis: There is also the practical consideration of those who have to provide for it.

2.42 a.m.

Mr. Tinker: I would suggest to the House what might be done would be to take the highest number in any one shift and let shelter be provided for that number. Something might happen at the mine and the men would congregate at the pithead, and there might be a period when there are 700 men there at one time. Before the first cage goes down something might happen, and if it is the intention of this Bill to provide shelter in times of emergency we have to take the extreme point when it can be found that all the


men are congregated together. I think the only possible way to provide for this emergency is to provide that in this case the highest number in any one shift shall be provided with shelter.

Mr. Marshall: I think before agreement is finally arrived at the position of other factories besides mines ought to be put before the House. I want to refer to some of the engineering firms in this country.

Mr. Speaker: That does not arise on this Amendment.

Sir J. Anderson: On behalf of the Government may I say that, if the Amendment of the other side is withdrawn and the Amendment of the Attorney-General accepted, we shall certainly go into the matter fully with representative people and do our best to arrive at a form of words on which we may all be agreed.

Mr. H. Morrison: I beg to ask leave to withdraw the Amendment. I understand the Attorney-General will move his Amendment, as otherwise we shall have nothing before us.

Amendment to Lords Amendment, by leave, withdrawn.

The Attorney-General: I beg to move, as an Amendment to the Lords Amendment, in line 6, to leave out from "highest" to the end of the Lords Amendment, and to add:
figure below which throughout any consecutive period of fifteen minutes the numbers do not fall.

Amendment to Lords Amendment agreed to.

CLAUSE 84. —(Other provisions as to interpretation.)

Lords Amendment: In page 75, line 26, at the end, insert:
Provided that, in the case of a building (including a commercial building) or block of buildings let out in parts each of which is separately valued for rating purposes or consists of two or more parts so valued, the annual value of every part so valued (except any part which has depreciated in value by reason of the execution therein under this Act of works for the provision of air-raid shelter) shall be taken for the purposes of the provisions of this Act relating to increases of rent, to be—


(a) where the rateable value and the net annual value of that part are the same, the rateable value appearing at the material date in the valuation list;
(b) where they are different, the net annual value of that part appearing at the material date in the valuation list,

and the annual value of the whole building or of any part thereof comprising a number of parts which are separately valued for rating purposes, shall be taken for the purposes of the said provisions to be the sum of all the annual values of all the parts or, as the case may be, the parts so comprised.

2.45 a.m.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."

In the Bill as it left this House, where expenditure incurred in the provision of shelter had to be apportioned, it was provided that the proportion should be according to the annual value of the separate parts of the building, the building being let out in parts, and for this-purpose the annual value was given a special definition in the Bill. It has been: suggested that where the different parts of a building are separately valued for rating purposes and separate values are entered in the valuation roll it would make for general convenience and simplicity if the values so entered could be so taken instead of the annual value as specially defined in the Bill. That is the object of this Amendment.

Lords Amendment: In page 76, line 19, after "tenancy," insert "but does not include a mortgage."

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."

This Amendment should be taken with the Amendment on line 42. The effect is simply this, that a mortgagee is to be treated as an owner for the purposes of the Bill if and only if he has taken possession or has put in a receiver. The mortgagee in possession for all practical purposes can, it is suggested, be treated as if he were an owner, but on the other hand if he remains in the background it is obviously not only unjust but indefensible that he should be treated as a person with the responsibility of a landlord.

Subsequent Lords Amendment, in page 76, line 42, agreed to.

Lords Amendment: In page 77, line 15, leave out "supply gas" and insert "do so."

Mr. Deputy-Speaker (Colonel Clifton Brown): I have to acquaint the House that this Amendment and the next Lords Amendment raise a question of Privilege.

Sir J. Anderson: I beg to move, "That this House doth agree with the Lords in the said Amendment."

The effect of this Amendment and the next Amendment is that although they make no change in the substance of the Bill they do bring within the definition of public utility undertakings non-statutory water companies. Non-statutory gas companies are included. The Amendment does make a difference as regards non-statutory water companies, but it makes no difference to the Clause otherwise.

Subsequent Lords Amendment, in line 16, after "gas" insert "or water," agreed to.

CLAUSE 85. —(Application to Scotland.)

Lords Amendment: In page 79, line 1, after "lease" insert:
references to every lease derived from the estate or interest of an owner shall be construed as references to every lease granted by an owner and every sublease of the whole or any part of the premises subject to such leases; 'mortgage' means a heritable security and 'mortgagee' means the creditor in a heritable security.

2.49 a.m.

The Lord Advocate (Mr. T. M. Cooper): I beg to move, "That this House doth agree with the Lords in the said Amendment."

This is a drafting Amendment to translate the language into Scottish legal terms.

Subsequent Lords Amendments to page 81, line 7, agreed to.

Lords Amendment: In page 81, line 28, after "purposes" insert "of Section ten and."

The Lord Advocate: I beg to move, "That this House doth agree with the Lords in the said Amendment."

This is one of several Amendments dealing with the case of Scottish law relating to tenements, parts of which are in separ-

ate ownership and on separate floors. The effect of applying Clause 10 is that the owners, jointly and severally, will have the powers conferred by Clause 10.

Subsequent Lords Amendment, in page 82, line 32, agreed to.

Lords Amendment: In page 82, line 37, at the end, insert:
(5) Where a notice has been served in pursuance of Section sixteen of this Act on the owners of such a building as aforesaid, any one of such owners may, in default of agreement among them as to the execution of the works in pursuance of the notice, himself execute the works, and for the purpose of so doing shall have the like powers and immunities as are conferred by this Part of this Act on the owners jointly and severally, and the expenditure incurred by him in so doing shall for the purpose of this Section be deemed to be expenses of the owners.

The Lord Advocate: I beg to move, "That this House doth agree with the Lords in the said Amendment."

This Amendment also is designed to meet the case of the Scottish tenement and to enable any one of a number of owners to carry out a notice served in the case of a commercial building upon the owners.

Subsequent Lords Amendments to page 87, line 9, agreed to.

Lords Amendment: In page 87, line 33, at the end, insert:

"In Section sixty-six for Sub-section (3) there shall be substituted the following Sub-Section:
'(3) Where a heritable creditor in possession is for the purposes of this Act the owner of any commercial building or any such building or block of buildings as aforesaid, it shall be competent for the local authority to make, on his application, a charging order in his favour charging and burdening the building or block of buildings with an annuity to repay to him any money reasonably expended by him for the purpose of providing air-raid shelter in connection with the building or block or complying with any obligation imposed on him by or under this Act as owner of the building or block in like manner as they may make a charging order in favour of an owner under Section twenty-one of the Housing (Scotland) Act, 1925, and the provisions of Sections twenty-one and twenty-two of that Act shall apply accordingly subject to the following and any other necessary modifications:
An annuity constituted a charge by a charging order made under this Sub-section shall rank pari passu with the heritable security in virtue of which the


heritable creditor is in possession of the building or block.'

The Lord Advocate: I beg to move, "That this House doth agree with the Lords in the said Amendment."

The new Clause which was accepted by the House a few minutes ago in relation to the powers of trustees and liquidators has certain consequential provisions adding to the security of a mortgagee. Unfortunately the Scottish law regarding securities makes it impossible to attach those provisions in the precise form of the Clause relating to England. Instead of doing so, however, it is proposed in this Clause to achieve much the same result by enabling a charging order to be obtained by a creditor in possession, or in English wording, the mortgagee in possession, who has incurred expenses in connection with air-raid precautions. The effect of this Clause is substantially to achieve the same result.

2.54 a.m.

Mr. Gallacher: I want to ask the Lord Advocate whether he will now face up to the question which arises on this Clause. It will be competent for the local authority on his application to make a charging order in his favour, charging the building or block of buildings with an annuity. That means that this block of buildings is going, as a consequence of this, to be increased in value for all the purposes of raising money. It is going to increase the value of the property. How is it then that the tenant has to pay for something which is going to increase the value of the property for the owner?

The Lord Advocate: The hon. Member for West Fife (Mr. Gallacher) is in error in assuming that this Clause has anything to do with the liability of the tenant. This Clause is a translation into the appropriate Scottish form of the Lords Amendment on page 9 of the Order Paper and deals with the case where a mortgagee in possession has been obliged, let me assume, by a notice served by a local authority, to incur expenditure on someone else's property. The reason for each Clause is that if he is to do that he wants to get his money back. In England he adds the amount of expenditure to his security. We cannot do that but we can make him apply to the local authority for a charging order which will enable him to get his money back in the same way.

Mr. Gallacher: Is it not the case that the property is actually increased in value?

The Lord Advocate: No doubt it is, and it is for that very reason that it seems unfair that one man should be obliged to spend money in order to increase the value of another person's property.

Mr. Gallacher: If the mortgagee increases the value of the property of the landlord why should the tenant have to pay?

Remaining Lords Amendments agreed to; [One with Special Entry.]

Orders of the Day — MILK INDUSTRY [PAYMENTS].

Resolution reported,
That, for the purposes of any Act of the present Session to authorise certain payments out of the Exchequer to milk marketing boards in respect of certain milk, it is expedient to authorise the payment out of moneys provided by Parliament—
(a)to milk marketing boards by which payments are or have been made to producers in respect of accredited milk, standard milk, tuberculin tested milk, certified milk or milk from attested herds, being in any case milk sold or used at any time during the two years ending with the thirtieth day of September, nineteen hundred and forty, of sums in respect of that milk in accordance with the tables at the end of this Resolution;
(b)to any milk marketing board which,in respect of any period between the first day of October, nineteen hundred and thirty-eight, and the beginning of October,nineteen hundred and forty, gives effect or has given effect, to approved arrangements for increasing the demand for milk by the sale thereof at a reduced price for consumption—
(i) by pupils who attend recognised public elementary, secondary or day schools and persons under eighteen who attend other schools or institutions or undergo courses of instruction; or
(ii) by expectant or nursing mothers or children under five,
of sums not exceeding the loss incurred by the board in carrying out the arrangements;
(c)to milk marketing boards, in respect of milk used in manufacturing butter or cheese during the two years ending with the thirtieth day of September, nineteen hundred and forty, of sums calculated, in the case of milk used for butter, by reference to the amount by which the price of imported butter falls, in a winter half-year,


below one hundred and twenty-five shillings per hundredweight, and, in a summer half-year, below one hundred and fifteen shillings per hundredweight, and in the case of milk used for cheese, by reference to the amount by which the price of imported cheese falls, in a winter half-year, below sixty-seven shillings and sixpence per hundredweight, and, in a summer half-year, below sixty-two shillings and sixpence per hundredweight, so however that the payments for any year shall not be made in respect of more than two hundred and fifty million gallons of milk in all;
(d) of the administrative expenses incurred for the purposes of the said Act by the Minister of Agriculture and Fisheries and the Secretary of State;
and to authorise the payment into the Exchequer of any sums received under the said Act by any Minister of the Crown.

Table I.


 Milk produced in England which is sold otherwise than by retail or semi-retail or is used in manufacturing cheese at a farm, and milk produced in Scotland sold to or through a milk marketing board or used in manufacturing cheese at a farm.


Kind of Milk.
Scale of Exchequer Contributions. (Pence per Gallon.)


All Tuberculin Tested or Certified Milk, and milk from an attested herd which is Accredited or Standard Milk
1¼


Accredited or Standard Milk which is not Tuberculin Tested or Certified Milk and is not milk from an attested herd
¾


Milk from an attested herd which is not Accredited, Standard, Tuberculin Tested or Certified Milk
½

Table II.


Other milk.


Kind of milk.
Scale of Exchequer Contributions. (Pence per Gallon.)


All Certified Milk
¾


All Tuberculin Tested Milk, and milk from an attested herd which is Accredited or Standard Milk
¾


Accredited or Standard Milk which is not Tuberculin Tested or Certified Milk and is not milk from an attested herd
⅝

Orders of the Day — WAYS AND MEANS [7th July].

Resolution reported:

LONDON GOVERNMENT.

"That, for the purposes of any Act of the present Session to consolidate with amendments certain enactments relating to local government in London, it is expedient to authorise the forfeiture and payment into the Exchequer in certain cases of sums equal to one-half of the salaries of persons appointed to act temporarily as medical officers of health for areas within the administrative county of London, being sums otherwise payable by the London County Council to the authorities appointing such persons."

Orders of the Day — MARRIAGE BILL.

Order for Consideration of Lords Amendments read.

Motion made, and Question, "That the Lords Amendments be now considered," put, and agreed to. —[Mr. A nstruther-Gray.]

Lords Amendments considered accordingly.

CLAUSE I.—(Notices and certificates, where one party resides in Scotland and the other in England.)

Lords Amendment: In page 2, line 37, at the end, insert:

NEW CLAUSE A.—(Power to accept notices and issue certificates where one party is residing in England or Scotland.)

"(1) Where—

(a)a marriage is intended to be solemnizedin England between parties of whom one is residing in England; and
(b)by virtue of any enactment to which this Sub-section applies, a certificate issued to the other party otherwise than by a superintendent registrar in England may be treated for the purpose of the marriage as if it had been issued by such a registrar;

the superintendent registrar of the district in which the first-mentioned party is residing shall have power, and shall be deemed always to have had power, to accept notice of the marriage given by that party, subject to and in accordance with the provisions of Section four of the Marriage Act, 1836, as amended by any subsequent enactment, as if both parties were residing in different districts in England, and the provisions of the Marriage Acts, 1811 to 1934, relating to notices of marriage and the issue of certificates for marriage shall apply, and shall be deemed always to have applied, accordingly.

(2)Where—

(a)it is intended that a marriage shall be contracted or celebrated in Scotland between parties of whom one is residing in Scotland; and
(b)by virtue of any enactment to which this Sub-section applies, a certificate issued to the other party otherwise than by a registrar in Scotland, may be treated for the purpose of the marriage as if it had been issued by such a registrar;

the registrar of the district or parish in Scotland in which the first-mentioned party is residing shall have power, and shall be deemed always to have had power, to accept notice of the marriage given by that party, subject to and in accordance with the provisions of Section seven of the Marriage Notice (Scotland) Act, 1878, as if both parties were residing in different parishes or districts in Scotland, and the provisions of that Act relating to notices of intended marriages and the granting of certificates of due publication thereof shall apply, and shall be deemed always to have applied, accordingly.

(3)The enactments to which Sub-section (1)of this Section applies are Section eight of the Marriage and Registration Act, 1856, Section three of the Naval Marriages Act, 1908, and paragraph (a)of Sub-section (1)of Section one of the Marriage of British Subjects (Facilities)Act, 1915, and the enactments to which Subsection (2) of this Section applies are the said Section three and the said paragraph (a) as those enactments apply to Scotland."

Mr. Anstruther-Gray: I beg to move, "That this House doth agree with the Lords in the said Amendment."

Mr. Davidson: When a new Clause is moved or a Sub-section is deleted, cannot we have the words of the new Clause?

Mr. Deputy-Speaker: Unless the hon. Gentleman is raising a question, he cannot oppose.

Mr. Davidson: I am only asking, very courteously.

Remaining Lords Amendment agreed to.

Orders of the Day — MARRIAGES VALIDITY BILL [Lords].

Considered in Committee; reported, without Amendment; read the Third time, and passed, without Amendment.

The remaining Orders were read, and' postponed.

It being after Half-past Eleven of the Clock upon Monday evening, Mr. Deputy-Speaker adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Five Minutes, after Three o'Clock, a.m.